Strategic information  Aegon’s strategy 10 Long-term industry trends Italy remained in recession. Meanwhile, the UK economy showed  stronger growth. In the Netherlands, the economy contracted.  Many European countries continued to struggle with structural,  economic and financial sector reform.  Overall growth in emerging markets was relatively strong,  though at a much lower rate than in previous years. In China, the  world’s second largest economy, growth slowed to 7.6%, with  export markets sluggish and the Chinese economy re-focusing  on internal consumption. In Central & Eastern Europe, growth  rates improved, due in part to a stronger performance from the  region’s main trading partners in Western Europe.  Share prices in both the United States and Europe rose to new  highs on signs of renewed economic growth. The Dow Jones  Industrial Average ended the year up nearly 26%; over the same  period, the FTSE-100 gained almost 15%. The long-term yield on  US bonds also increased significantly on expectations of tapered  debt purchases by the Federal Reserve. Short-term interest rates  remained at historical lows of close to zero. In the United States,  the Federal Reserve began to tighten monetary policy at the end  of the year in response to further significant improvement in  unemployment rates. Yields on 10-year German bonds improved,  due in part to increased demand from eurozone banks. Increased financial stability in the eurozone strengthened the  euro. By the end of 2013, the euro had gained just over 3.6%  against the US dollar, and more than 3% against sterling. Slower  economic growth brought depreciation in many emerging market  currencies, including the Brazilian real, the Indian rupee and the  South African rand.  Economists are optimistic about further economic growth in  2014. Nevertheless, the global economy faces considerable  risks, particularly from the future direction of Federal Reserve  monetary policy and the management of the US government  budget. Uncertainty also persists with regard to structural  economic reform in Europe, and continued weak labor markets  on both sides of the Atlantic. Emerging market growth remains  relatively high, but may be impacted as the global economy  adjusts to historically low GDP growth rates, especially in  China and India.  Companies are held to higher standards of corporate behavior.  There is increasing pressure on companies to be responsible  employers, investors and purchasers of goods and services.  Many companies increasingly recognize the connection between  financial performance and responsible resources management.  The economic recovery remains uncertain.  Despite improvement,  economic growth remains uncertain. Financial volatility has  increased, and interest rates are at historical lows, which may  restrict profits for insurance companies and other financial  service providers. Increased volatility means customers are more  aware of financial risk.  There is change in the way insurance and pension products are  sold and purchased.  The regulatory environment has changed  significantly in many of Aegon’s markets. In the United States,  for example, there has been major healthcare and financial  services reform. In the United Kingdom and the Netherlands,  new legislation has effectively ended commissions for brokers  and other intermediaries. As a result, financial services providers  like Aegon, and financial advisors and intermediaries, are seeking  to interact better and more regularly with their customers  to serve their broader needs. Meanwhile, new technology is  increasing the ability of customers to research and buy financial  products online. Emerging competition from online-only  providers has begun to challenge established business models. The world’s population is growing older.  By the middle of the  century, the United Nations estimates that worldwide almost  1.5 billion people will be over the age of 65. More than three  quarters will live in less developed economies. Rising life  expectancy will increase the length of retirement. At the same  time, governments are no longer able to afford generous state  pensions. This means greater demand for life insurance, pensions  and other long-term savings and investment products as  individuals seek ways to achieve a secure financial future.  The life insurance and pensions industry is in a period of  significant change for several reasons. These include shifts  in the global economic balance, aging populations, changing  demographics, new legislation, and the increasing trend of  customers who research financial services products and then  purchase online. Annual Report 2013