ANNUAL REPORT 2010   OUR STRATEGY  STRATEGY 13 SHARPENING OUR FOCUS FOCUS ON… Robert Juarez, Transamerica Despite the improvement in 2010, market conditions  remain uncertain with growth still hampered by high  unemployment numbers and household debt levels.  AEGON expects market conditions to remain uncertain  throughout 2011. Global interest rates were under pressure during the first  nine months of 2010, following concerns about sovereign  debt in a number of peripheral European countries.  However, AEGON’s exposure to the sovereign debt of  these countries was, and remains limited. During the  remainder of 2010, interest rates began to recover but  did not reach the levels of the beginning of the year, but  generally have a negative impact on AEGON’s  businesses.  In Spain, the financial sector is undergoing significant  consolidation and restructuring. Consequently, a number  of the country’s savings banks are in the process of  either merging or entering into so-called integration  agreements (SIPs). AEGON remains committed to the  Spanish market and intends to maintain its current share  of the bancassurance market there. AEGON expects these government measures in Hungary  and Poland to have a combined negative effect on  underlying earnings of approximately EUR 25 million for  the full year of 2011. During 2010, market and financial conditions continued  to improve, following the upward trend that started in  2009. Equity markets continued to rise but remained  volatile, while corporate credit spreads remained fairly  stable. This had a positive impact on AEGON’s earnings  and capital position. Sales of equity-linked products  benefited from positive sentiment on equities. AEGON  saw improved sales on variable annuities and mutual  funds as equity markets further improved. In Poland, the Government plans to amend pension fund  legislation as well. The main changes would be a lower  contribution fee, special requirements on minimum  mandatory capital and solvency margin, and the creation  of three pension funds with distinct risk profiles  (conservative, balanced, aggressive). AEGON’s main markets are the United States, the  Netherlands and the United Kingdom. Together, these  markets account for more than three-quarters of  AEGON’s business. Over the past decade, the company  has built up operations in new, emerging markets.  AEGON is present in six countries in Central & Eastern  Europe, as well as China, India and Japan in Asia, and  Brazil and Mexico in Latin America. AEGON is also one  of the leading providers of life insurance in Spain and  has a partnership in France with insurance and pension  specialist AG2R La Mondiale. As part of new pension legislation in Hungary,  mandatory pension fund assets have been taken over  by the Hungarian State during the first quarter of 2011.  In addition, asset management and administration fees  have been reduced. Market conditions 