Notes to the consolidated financial statements of Aegon N.V.  Note 5 202 Sensitivity analysis of net income and shareholders’ equity to various underwriting risks is shown in the table that follows.  The sensitivities represent an increase or decrease of mortality and morbidity rates over best estimate. Increases in mortality rates  lead to an increase in the level of benefits and claims. The impact on net income and shareholders’ equity of sales transactions of  investments required to meet the higher cash outflow is reflected in the sensitivities. A change in actual experience with mortality or  morbidity rates may not lead to a change in the assumptions underlying the measurement of the insurance liabilities as management  may recognize that the change is temporary. Life insurers are also exposed to longevity risk. Increased life expectation above Aegon’s  assumed life expectation at the time of underwriting negatively impacts its results. Refer to note 2.20 for a discussion on how  longevity assumptions are accounted for. Sensitivity analysis of net income and shareholders’ equity to changes in various  underwriting risks Estimated approximate effect 2013 2012 On shareholders'  equity On net income On shareholders'  equity On net income 20% increase in lapse rates (99) (82) (95) (82) 20% decrease in lapse rates 70 92 69 86 10% increase in mortality rates (71) (74) (86) (70) 10% decrease in mortality rates 6 48 53 67 10% increase in morbidity rates (80) (63) (83) (69) 10% decrease in morbidity rates 47 68 52 69 Aegon the Netherlands partially hedges the risk of future longevity increases in the Netherlands related to a part of its insurance  liabilities. Aegon the Netherlands bought a longevity index derivative, which will pay out if in twenty years the mortality rates have  decreased more than a predetermined percentage compared to the base scenario at the moment of signing the contract. Payout  of the derivative is defined based on a 'cumulative cash index', which represents the cumulative payout to a predefined (synthetic)  insured population in relation to the expected payout (in the base scenario) to this same population. Both parties in the contract  have the possibility to terminate the contract after ten years (early termination clause). The payout is maximized at a predetermined  percentage compared to the base scenario. To further protect the longevity position of Aegon the Netherlands and combining this with protection for catastrophe mortality in  the US, Aegon bought an additional longevity index derivative. This derivative will pay out in twenty-two years if some combination  of higher than expected mortality rates in the United States and/or lower than expected mortality rates in the Netherlands persists  over the next twenty years and, at that time, is expected to continue to do so. Payout of the derivative is defined based on a 'terminal  present value', which represents the sum of 1) the cumulative payout to a predefined (synthetic) insured population over the next  twenty years and 2) the remaining expected liability on this same population. The preceding sum is compared to amounts set at  the moment of signing the contract to determine the actual payout. On March 1, 2011, the European Court of Justice (ECJ) delivered a judgment in the Test Achats case which relates to the ability of an  insurance company to use gender as a rating factor when pricing risk. The ECJ has ruled that using gender as a rating factor when  pricing risk is invalid. However, the ECJ has granted a transitional period for relief for implementation. The effect of this is that, as from  December 21, 2012, it is unlawful to use gender-related factors for determining premiums and benefits under insurance policies.  For segment reporting purposes, the following non-IFRS financial measures are included: underlying earnings before tax, income tax  and income before tax. The reconciliation of these measures to the most comparable IFRS measures is presented in this note. These  non-IFRS measures are calculated by consolidating on a proportionate basis Aegon’s joint ventures and associated companies. Aegon  believes that its non-IFRS measures provide meaningful information about the underlying results of Aegon’s business, including insight  into the financial measures that Aegon’s senior management uses in managing the business. Among other things, Aegon’s senior management is compensated based in part on Aegon’s results against targets using the non-IFRS  measures presented here. While many other insurers in Aegon’s peer group present substantially similar non-IFRS measures, the non- IFRS measures presented in this document may nevertheless differ from the non-IFRS measures presented by other insurers. There is  no standardized meaning to these measures under IFRS or any other recognized set of accounting standards. Readers are cautioned to  consider carefully the different ways in which Aegon and its peers present similar information before comparing them. Aegon believes the non-IFRS measures shown herein, when read together with Aegon’s reported IFRS financial statements, provide  meaningful supplemental information for the investing public to evaluate Aegon’s business after eliminating the impact of current  5 Segment information Annual Report 2013