3 Critical accounting estimates and judgment in applying accounting policies

In preparing these consolidated financial statements, Aegon has made judgments, estimates and assumptions that affect the application of the Group’s accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

Included among the material (or potentially material) reported amounts and disclosures that require extensive use of estimates are the fair value of certain invested assets and derivatives (please see note

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.

 

 

 

 

 

Macro-economic context

When making judgments, estimates, and assumptions, Aegon has taken into consideration the current macro-economic context, such as the conflicts between Ukraine and Russia and between Israel and Hamas, which continued in 2025; and the increased trade frictions that can lead to persistent volatility in energy and commodity prices, supply chain disruptions and shifting global trade patterns. In addition to causing a humanitarian crisis, these events impacted global financial markets and triggered significant economic turbulence. Aegon closely monitors financial and wider economic developments to understand our exposure to potential shocks in the markets where we invest, and Aegon works proactively to mitigate related

Management’s assessment of going concern

The consolidated financial statements have been prepared on a going concern basis, on the assumption that the Company will continue in operation for the foreseeable future. From December 31, 2025, management assessed the following main areas: financial performance; capital adequacy; financial position and flexibility; liquidity; ability to access capital markets; leverage ratios and the level of Cash Capital at Holding, and concluded that the going concern assumption for Aegon is appropriate. For further details, see note

Actuarial and economic assumptions

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amount of insurance related assets and liabilities within the year ending December 31, 2025, is included in note

Measurement of the expected credit loss allowance

The measurement of the expected credit loss (ECL) allowance for financial assets measured at amortized cost and FVOCI is an area that requires the use of complex models and significant assumptions about future economic conditions and credit behavior (for example, the likelihood of customers defaulting and the resulting losses). Explanation of the inputs, assumptions, judgements and estimation techniques used in measuring ECL and information incorporating forward-looking information into the measurement of the ECL is further detailed in note

Classification of financial assets

The classification of financial assets is based on Aegon’s business model for managing them and their contractual cash flow characteristics. Aegon determines the classification of the financial assets by assessing the business model and whether the contractual terms of the assets are solely payments of principal and interest (SPPI) on the principal amount outstanding. The classification of financial assets determines how they are accounted for and measured on an ongoing basis.

Determination of fair value and fair value hierarchy

Fair value is defined as the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either:

Aegon uses the following hierarchy for measuring and disclosing the fair value of assets and liabilities:

The degree of judgment in measuring fair value inversely correlates with the level of observable valuation inputs. Aegon prioritizes observable inputs and minimizes unobservable ones. Financial instruments with quoted prices in active markets require less judgment, while those without quoted prices need more judgment and use models or pricing techniques.

 

 

 

 

 

 

Aegon assigns fair value levels to instruments based on type and price source, periodically reviewing this logic to adapt to the current market environment.

For further details on fair value hierarchy and fair value measurement, refer to note