Thank you for joining this conference call on Aegon's Third Quarter 2022 Results. Before we start we would like to ask you to review our disclaimer on forward-looking statements which you can find at the back of the presentation. With me today are Aegon's CEO, Lard Friese; CFO, Matt Rider; and Chief Transformation Officer, Duncan Russell who will take you through our 3Q results and the progress we are making in the transformation of Aegon. After that we will continue with our Q&A session. And on that note, I would like to give the floor to Lard Friese.

Yes. Thanks Jan Willem and good morning everyone. We appreciate that you're joining us on today's call. It's been a busy few months for us here at Aegon and I want to start by running you through our achievements on slide number two. In the past few months we have taken a number of important steps in the transformation of Aegon. We have made substantial progress on our operational improvement plan and taken additional actions to maximize the value of both our US variable annuity book and TLB, our high net worth insurance business. And of course, we recently announced the combination of Aegon the Netherlands with ASR. We also made solid progress on our ambition to grow our strategic assets, especially in our life and retirement businesses despite continued financial market volatility and political unrest. Our operating results in the third quarter declined by 11% on a constant currency basis, reflecting adverse market conditions that more than offset an improvement in claims experience in the United States expense savings and the benefit from growth initiatives. Based on extensive analyses and the learnings from engagements with third-parties, we have concluded that the best option with respect to our US variable annuity portfolio is to continue to own and actively manage it at least in the near-term. Furthermore, we recently completed an internal reinsurance transaction between TLB and Transamerica that freed up $600 million of excess capital. This will in part be used to create a buffer to mitigate the impact of adverse equity markets which materially reduces the capital sensitivity of our US variable annuity book. But we're not done yet. We continue to see opportunities for growth and greater efficiency and we will remain focused on the execution of our strategic agenda. So, let's turn to slide three. In…

Thank you, Lard. Let's move to slide 9. At our Capital Markets Day, we laid out our strategy to focus on three core markets, three growth markets, and one global asset manager. We made clear that businesses outside the corporate amidst they will be managed with tight capital and a bias to exit. We made good progress on our portfolio rationalization, whether it's through the divestment of Central and Eastern Europe, or our various actions to release capital by winding down or selling subscale ventures and businesses. TLB our high net worth business was the largest remaining operation outside the core perimeter. In the past two years, it has been managed with a focus on strict cost control and capital efficiency to increase its capital generation. Over the past years, we have considered different strategic options for TLB, including a divestment. Following this review, we have decided to extend our internal reinsurance of TLB's closed block to Transamerica. As of the fourth quarter of 2022, Transamerica will also reinsure the remaining 75% of TLB's close block of universal life policies that have previously not been reinsured meaning that 100% will now be internally reinsured. Transamerica will hold additional reserves to cover the underlying risks, but it will also be allowed to recognize excess capital of TLB in its capital position. This frees up around $600 million of excess capital on a US level, which will increase Transamerica's RBC ratio by approximately 30 percentage in the fourth quarter of 2022. As a consequence, we feel that we have landed on the optimal solution for TLB compared to the alternatives and therefore, we'll classify the business going forward as a financial asset with a continued focus on improving cash flows and disciplined capital management. Next on Slide 10, let me update you…

Aegon's operating result decreased by 3%, but by 11% on a constant currency basis to €429 million. Lower fees due to adverse market movements and expected outflows in variable annuities more than offset the benefits from expense savings, growth initiatives and an improvement in claims experience. As Lard mentioned, addressable expense savings for the trailing four quarters increased by €50 million over the last quarter and now total ṣ€300 million compared with the full year 2019 expense base. Operating capital duration before holding, funding and operating expenses amounted to €399 million mainly reflecting strong performance from the US, driven by income from alternative investments and seasonality and reserve movements in the US. Cash capital at the holding decreased to €1.4 billion, mainly as a result of €373 million of capital being returned to shareholders, which more than offset this quarter's free cash flow of €67 million. Our gross financial leverage amounted to €5.8 billion, which is slightly higher than last quarter due to the strengthening of the US dollar. As mentioned in the press release, we issued on October 27, we intend to use up to €700 million of the cash proceeds from the transaction with ASR to reduce our leverage further. Our balance sheet remains strong with the capital positions of all three of our main units remaining above their respective operating levels. The group Solvency II ratio decreased by two percentage points over the third quarter to 212% mainly from market movements. Furthermore, eligible owned funds reduced due to tiering restrictions on the amount of deferred tax assets that we are allowed to recognize as capital. Turning to Slide 13. We saw the third quarter operating result come in at €429 million. Adverse markets have impacted our results in particular in Asset Management and in the United States.…

Yeah. Thanks Matt. Let's go to slide 19. I'd like to reiterate that we are maintaining a high base in Aegon's transformation. We are making good progress on the operational improvement plan, we are maximizing the value of our financial assets and we are investing in profitable growth. I'm, therefore, confident about delivering on our strategic and financial commitments. As a final note I want to share my appreciation for the hard work and dedication of all colleagues to support our customers' needs in challenging times. Specifically our employees who are affected by the transaction with ASR and we continue to work tirelessly to improve our performance despite the uncertainty that the transaction brings for them personally. It is thanks to the efforts of our employees that we are able to continue to improve our operational performance and accelerate our strategy. I would now like to open the call for your questions. Please be so kind to limit yourself to two questions per person. Operator, please open the Q&A session.

Thank you. [Operator Instructions] The first question from Andrew Baker from Citi.

Great. Thank you for taking my questions. So the first is on capital generation. Just wondering if you could provide some of the usual moving parts on the capital generation and what you've seen in the clean quarter run rate for both Q4 and then also 2023? And then the second one is on the variable annuity book. So, obviously, you're retaining the book in the near-term but it feels like you're not rolling out Q3 transactions just based on the growth of the underlying US business and when you can reduce that the impact of counterparty risk and the strategic costs. Just wondering based on your projections today, how long do you think it will be before those two constraints are small enough that you might be able to consider a transaction for that book? Thank you.

Yeah. Thank you very much Andrew. I'm going to ask Matt to do the capital generation, and then thereafter Duncan on the VA. So first Matt over to you.

Yeah. Thanks Andrew. So for the third quarter the operating capital generation from the business units that we reported was €399 million. We did have some what we would call unfavorable mortality and morbidity experience there in the amount of about €41 million. But we did get a benefit in two main items; one was in alternative investment income was higher than what we had expected in the amount of about €30 million. And then we had some favorable benefit from some seasonality in universal life reserving. And this was for an amount of about €35 million. So we also had about €25 million of good guys from international where we benefited from some lower required capital from just change in asset mix together with some favorable claims experience. So if you net that all out, we end up with about a clean number for the quarter of about €350 million. So if you think about going forward for 2022 we have year-to-date reported €1,175 million of operating capital generation in the business units adding sort of a clean run rate of the €350 million for the fourth quarter and that gets you to something around €1.5 billion. So that's an upgrade of the OCG guidance that we had given last quarter which was around €1.4 billion. Now we say it's about €1.5 billion. So it looks like we're on a good track to be able to achieve that. At this point in time we're not giving any guidance on 2023 yet. We will do that in due course likely in the fourth quarter as we work through those ones.

Thank you very much, Matt. So Duncan, the VA question?

Thanks, Andrew. Well you're right to summarize that the two drivers -- the two main considerations for us were the counterparty exposure given we don't have a separate legal entity. So any deal we would do would be in reinsurance for. And the second one was the need to deal with stranded costs which of course would be possible. But some of those costs will be fixed. And as you know we are quite focused at this point in time in reinvigorating the growth engines within Transamerica. So that's our focus right now. In terms of the question in terms of time line we'll continue to evaluate things. Our work won't stop on this block of business. We've derisked it materially and we have stabilized the capital generation coming out of it materially. But we're going to continue to look for incremental management actions as we have done in the past. Obviously, we're not going to look to transact in the very near-term. But given that the policy count is running down between 8% and 10% per annum both the items I identified in the coming years should become less relevant for us. And therefore again we could be an opportunity for us to reevaluate in the coming years.

Great. Thanks, guys.

Thank you for your question. We are now taking the next question. The question from Robin van den Broek from Mediobanca. Please go ahead.

Yes. Good morning, everybody. I'm sorry if I ask something you mentioned in your introductionary remarks, but my line got cut off a few times. My first question is around the management actions in the US. I mean clearly it's raising your absolute level of RBC in local units, but besides that it's also reducing your volatility towards equity markets for the US as a whole. So my guess is that that should be quite remittance positive for the group. And I was wondering if you could give any commentary around that and also includes the potential for regular buybacks in that narrative? I mean, we've heard what you had to say last week after the Aegon deal. So we can expect quite material buybacks after H1 next year probably. I was just wondering, how this management action could affect your decision taking there already at the Q4 stage. Then, secondly, I think on the group ratio, you have some diversification benefits that dropped some Tier 3 eligibility issues. Did -- I mean, with the Dutch units coming out, I think, the diversification benefits will probably drop further. So just wondering if that was already reflected in last week's guidance on your group Solvency II ratio. And in relation to that should we even care about your group Solvency II ratio after the Dutch unit basically has transferred? I guess, the answer to the question is no, but I was just wondering about the reasoning. And maybe a follow-up question on the OCG bridge. I think, last quarter you did get guidance. I guess, now you're not doing it, because of all the deal uncertainty and you just want to, yes, have better visibility on the variables. Is that the reason, or are there other reasons to not give any guidance? Thank you.

We did it for this year, but not for next year. Matt, over to you.

Yes. With respect to the management actions you have it exactly right. So the Transamerica Life reviewed reinsurance deal will add about 30 percentage points to the RBC ratio and then we're effectively using 15 percentage points of that to fund voluntary reserves. So your question is, that's got to be remittance positive. Well, it's certainly cash flow positive for the US business and that's the intention here is, that we wanted to increase the solvency level of the US, but also to provide some level of funding for future growth, let's say. And then, if we get that growth, fantastic, that means we would have done our jobs and we would have written new business profitably. That's a good thing. If we don't get that growth, then we revert back to our normal capital management policy, where, if we have excess capital sitting in the country units then it comes up to the group. But for now we leave it in the US. With respect to the group ratio, yes, there was some small movement in the group solvency ratio. Yes, we lose a little a bit of diversification benefits and there was some market movements, but I think your main question related back to the announcement that we had previously done with respect to the ASR transaction. So when we telegraphed the group solvency ratio, it did in fact include the loss of diversification benefits that we would get into the group. So that's, I guess, the factual point. But as you had mentioned kind of in the last part of your question indeed, the group solvency ratio becomes even less important than it has been. We really look at the capitalization within the main country units together with cash capital at the holding is really the way that we manage capital within the group. When I talked about the OCG bridge hopefully that was clear to you that we've upgraded our guidance for 2022 to €1.5 billion. But indeed we just -- we have a lot of moving parts at this point and we want to work that through before giving any guidance on 2023. It goes no deeper than that.

Yes. When it comes -- Robin, just to finalize your list of questions. When it comes to regular buybacks and buyback potential for the company, I think, we've been quite clear about that last week. We -- in the context of the combination that we're going to create with ASR, the cash part of that consideration will come our way that we plan for a €1.5 billion return of capital. Of course we need to find a way to not make an endless, let's say, timeframe. And we'll navigate through that to make sure that we reduce the share count of the company with the €1.5 billion that we allocated for that. For the remainder, we have a stated policy which is that we have a cash buffer that we want to maintain between €0.5 billion and €1.5 billion, last week at the announcement of the ASR deal. We also said that we want to maintain that at a higher level, because we want to do two things in the U.S. One is create profitable new growth and be able to fund that. And secondly, that we want to use also money for some additional management actions or in-force management actions that we may want to do in the U.S. to make sure that we are able to do that. But beyond that anything that is in excess, of what we need for the overall business plan et cetera has a very clear priority. And that is that number one it goes back to stockholders over time unless there is a value-creating opportunity in front of us but the main priority is I think clear from that. With that, I think we've gone through your list, so, back to the operator.

Thanks.

Thank you for your question. We are now taking our next question. The question from Cor Kluis from AAOB. Please go ahead.

Good morning. It’s [indiscernible] Two questions first of all, VA business, especially as a percentage point non-life capital in that system makes it more stable. I think you mentioned this positive probably on the long-term for the free cash flow. What's the effect on the OCG or the capital generation of this transaction? And also related to this, are there more of such kind of transactions possible, because it's a voluntary action.

Yeah.

So is it possible that in a few quarters you will add again €300 million or something to make it even more stable? So that's on the VA part. Then, other question is also partly related to the ASR transaction when you basically swapped the Aegon Netherlands for a stake in ASR. What effect does that have on the debt robust structure because of course -- the holding and not in the unit? So the unit structure has changed as a result of this. Will that also -- yes have some consequences for the holding debt structure? We know of course you're going to reduce €700 million, but you also have to bring debt to other countries and whether they have impact on the interest cost other transactions? And maybe the last thing Matt that you just mentioned extra -- you want to keep some extra capital in the U.S. for extra management actions. Could you elaborate on what kind of things we have to think about? That's it from my side.

Thank you very much Cor. The first three are going to be Matt and then the last one Duncan on the -- transaction in the U.S, so, Matt, over to you for the first three.

Yes. Cor thanks. So for the VA business indeed by setting up this voluntary reserve we are reducing the RBC ratio by 15 percentage points, obviously more than made up by the TLB reinsurance transaction. It does have an impact on what we would expect for operating capital generation going forward. So you can think about it as €50 million a year round numbers over the next couple of years. Importantly, that's not the reason why we did the transaction. We really want to set up that voluntary reserve mainly to stabilize the RBC ratio not to inflate our OCG. That's not – yes. So yes, Lard reminds me that the €50 million OCG is indeed positive. You also sort of tacked on to that question is there an opportunity to do more of this sort of implying are we going to move this around quarter-by-quarter. No. Actually we have a mechanism to be able to accomplish this, which we don't want to touch for a number of years. This is not OCG management in any way. And we felt like that the level of voluntary reserves that we struck combined with the benefit that we're getting from TLB, really optimizes the day one effect, operating capital generation and really risk management mainly on the RBC volatility. Your next question was with regards to hey, does the ASR transaction change something with the structure of our debt stack? The short answer is probably not in the short term, something that we want to work out over time. Importantly, we did say that there was about a €700 million reduction in leverage that we would expect or I should say up to €700 million but that will be for I think another day to revisit that one. On the management actions Duncan, do you want to cover those?

Yes. Not an awful lot to add Cor apart from – we'll have to wait and see. I mean one of the key philosophies we've had since the Capital Markets Day, two years ago is indeed to look for ways to improve net present value, particularly the financial assets. And as you're aware over the last couple of years we've taken quite a lot of action whether that's in the Netherlands or in the US. Just looking at the VA in isolation we extended the dynamic hedging, we implemented a lump-sum buyout program, we increased the fees on separate items [ph], we implemented a long-term volatility assumption to reduce factory capital volatility, we increased the basket of indices within the hedge program to include NASDAQ to reduce further volatility and we announced reserve. So just on that block of business we've done an awful lot. That's before we take into account actually the long-term care and the life blocks. So we have a rhythm. We have a team in the US and also in the Netherlands and I'm confident that with that rhythm the team will find further out in the future.

Okay. Very clear. Thanks very much.

Thank you for your question. We are now taking our next question. The question is from David Barma from Exane. Please go ahead.

Good morning. Thank you for taking my question. The first I have is on the US life segment, where you mentioned some higher persistency in parts of the portfolio. So we discussed that in the second quarter I think and my understanding was that loss assumptions were very low. So the comments in today's release have any implications for reserving in the life book? That's my first question. And the second one is on the Netherlands, where you flag again today some realized losses linked to assets sales to maintain the liquidity position. What's the absolute amount of assets year-to-date that have been needed to maintain the liquidity position? And also could you help me understand the implications that this could have on ALM and the rerisking potential in the near-term? Thank you.

Thank you, David. Matt you take both?

Yes. So, I guess the first answer is pretty easy. We have been seeing low persistency and part of it we think due to COVID. In fact -- and now it does not have any implications for reserving today. I think everyone knows that we do our review of assumptions in the US in the second quarter of each year. We did so last quarter. So, there's no need to adjust anything at this point. With regard to the liquidity issue that you raised, yes, so within -- I'd say within the first nine months of the year, we actually had to fund about €8 billion worth of liquidity needs for collateral reasons. We do this through asset sales in part. This is all part of our liquidity management strategy. So, despite the fact that we had to fund a lot of liquidity during the first nine months, we maintained very high cash liquidity buffers in the companies and that's there to maintain our quite strong liquidity management policy, which we always try to remain -- always try to maintain at a level where we can withstand a 300 basis point increase in interest rates of that 1.5% immediate shock and then the other 1.5% over the course of one year. So, this is -- although it has not been business as usual obviously given a rising rate environment that's come up so quickly, we do have plans for this and we have dealt with it I think remarkably well.

Thank you.

Thank you for your question. We are now taking our next question. The next question from Michael Huttner for Berenberg.

Thank you. And I had three I'm really sorry. The first one is I think somewhere, but I'm not precise on this there's an implication that half of the VA to be expected capital generation, I think is right, it's to come the next five years. And I don't know what the figure is? I think it's about 400? And then the other question -- the part of that is how much of the capital will still be there in the next five years? If €1.1 billion you add €300 million, so €1.4 billion. Will you also have the amount of capital allocated by -- in the next five years is it going step, or does it kind of become a less attractive asset as it kind of matures? And secondly, what is the cost of the reinsurance transaction with Bermuda? So, is there a benefit loss in Bermuda which I'm -- I now have to kind of deduct? In other words, you're getting €50 million extra capital generation from this kind of move in the VA business, but is there a loss lot somewhere else which I should account for? And the last one is a question asking for reinsurance. So, last week, I think one of your peers had a €2.1 billion kind of for me surprised announcement maybe not for others. And I think a big reduction in solvency due to lapses, which I think was a previous question. And I just wanted to kind of dumbly confirm that I am correct that there's no risk like that at Aegon that your lapse assumptions are near zero? Thank you.

Thank you very much Michael. The first two will be done by Duncan, that's about the VA piece. And then I think the TLB and the last point you had will be done by Matt. Matt, maybe it's good if you start with those two last ones. Or you want to do the first -- okay. Duncan start with the VA piece first and then the –

I think, I got your question Michael. And you're right. We think that roughly half the value of the VA block i.e. with the value will emerge in the next five years. And that's actually one of the considerations we had when we weighed up transaction and the complexity of that versus keeping it in that, because the value is quite short term and its emergence we felt that the keep scenario – that had a similar waiting to keep scenario. In terms of how it runs off, roughly as I said, and I know it's roughly, there's a 10% reduction per annum in the policy count. So that runs off relatively stably per annum. What actually happens to the capital obviously is a bit sensitive to markets. So as markets go up over the period that means that the capital runoff less rapidly than the policy count, and if they don't then vice versa. So, capital is a bit more nuanced, because of the influence of markets, but the book is running off quite rapidly and as I said roughly half of value most in the first five years.

I'll take the next one. So, this is on the cost of the reinsurance transaction between TLB and Transamerica Life Insurance Company, the legal entity in Iowa. So in general from – I think easiest to talk about it from an operating capital generation perspective. So this is sort of a left pocket, right pocket thing. So you can think of Transamerica Life, Bermuda operating cap gen will come down by 30. US operating cap gen will come up by about 30 and is a wash. Obviously, nothing is really happening economically, although the reinsurance transaction does allow us to release capital more quickly through this mechanism, which is part of the point in doing this. The other one that you had mentioned was that, yes, there was a company in the US that had announced a significant charge as a result of revising lapse rate assumptions on secondary guarantee universal life contracts. And you are correct that, it happened again in the second quarter. So we kind of say, the same thing here. We are already operating under a granular lapse rate assumption where for the secondary guarantee universal life business, the business is quite sensitive to lapses, specifically at the older ages, specifically with higher face amounts and specifically if they're we say in money. And in this case we are – we have let's say over age 80 which is a very sensitive group. We have lapse rates that are less than 1% for policies that are age 80 and over $1 million in face amount. Our lapse rate is 0.5%. And if they're in the money in other words no account value but remaining to pay premiums, which is particularly sensitive we take a quarter of these levels. So we are already at the most sensitive areas close to a zero lapse rate. So this is something that we have taken care of over the years and we continue to update it every second quarter if there are changes then we make them, but we're already on very granular lapse rate assumption.

And just a reminder how much is this – any adjustments you made in Q2 how much it did cost back then?

The -- very small amount. It was a negligible amount really on our balance sheet on IFRS purposes. I think it was something in the order of maybe 200 million or something in that space.

Thank you so much. And thanks for all the lovely answers. Thank you and good luck.

Thank you for your question. We are now taking our next question from Ashik Musaddi from Morgan Stanley.

Yes. Thank you and good morning, Lard, Duncan and Matt. Just a couple of questions I have. So first of all is it possible to get the capital generation number or say cash flow numbers from TLB and the VA business as to -- given that you know are keeping it and you know would have much more visibility about the cash flows from this business in a general cost now. So what is the cash flows from this business going forward every year? And I guess you already gave some color about how far -- what would be the decline pattern, et cetera? So that would be helpful. And secondly, I think Matt you mentioned that you will decide on when to upstream the cash -- the capital release from the TLB transaction, once we have better visibility about whether the growth or investment in growth is required or not in the US business. How long do you think we would need to wait to see that? I'm just trying to understand as to for how long will this capital be kept in the US business, or is there a possibility that okay we are talking about two, three quarters and then take it out after that? Thank you.

Yes, Ashik. So I think on both of these -- both of the questions that you asked we will be able to provide some additional clarity at the Capital Markets Day that we intend to have in the first half of -- or actually in the second quarter of next year. But I can give you maybe some -- just some very basic information. Last year OCG in TLB was around €70 million. And again, as I had said, we would expect that to come down by 30 and we would -- I feel like they come up by 30. On the upstreaming cash, if we're not getting the growth when we would have visibility on that? Yes, we're working through our planning right now. Our strategic planning every year anticipates a certain level of growth, and we'll have better visibility as we get into next year and we'll update everybody at the Capital Markets Day in 2Q.

That's great. Thanks, Matt.

Thank you for your question. We are now taking our next question. The next question is from Michele Ballatore from KBW.

Yes. Thank you. So I have two questions. So the first question is I think this is the second quarter in a row that you're able to, let's say, to capture surplus capital from other entities, so you did also in 2Q with a captive thing you did in the second quarter and this quarter again. I mean how many -- I don't know if you can give us an idea of how many pocket of surplus capital you still have that are not for some reason captured? So this is the first question. The second question is clearly with today's transaction you have reduced the let's say the volatility on the fees component of your revenue for equity market should you have a low volatility -- sorry, a low sensitivity to interest rates when it comes to capital. What are the what kind of volatility -- what kind of factors you are most, let's say, worried about when we talk about volatility on capital and on results at this point? Thank you.

Thank you Michele. Matt?

So on the first how much more is there? How many other pockets of surplus capital do we have in any units? I think TLB was a very unique case. There again, we had a transaction that we were thinking about potentially doing there. We recognized that that was not the optimal way to go and then we go through a reinsurance solution. But in this case, we had flagged the idea of optimizing TLB either through some kind of a transaction or making it a financial asset as we have done. So, I would say that is sort of a unique circumstance. I think more to the point though is what you are seeing is active capital management, especially on the financial assets. Duncan had rolled through earlier all the actions that we had taken in the US with respect to the VA business with respect to long-term care, with respect to the life block, and we will continue to prosecute this. This is something that is a fundamental part of our DNA is to maximize the value of those financial assets. On capital volatility still the biggest area that we have for volatility of capital remains with the equity side of the balance sheet. So, really we took action within the -- we've just taken action to reduce the volatility going forward. We're establishing the voluntary reserve on the VA book. But we'd rather do that than to hedge the risk, equity risk in the base fees. So on that point, that still remains the biggest area of sensitivity, but you can see we've taken real actions here to reduce the level of sensitivity of our capital ratios to the financial markets. That's a fundamental part of what we're trying to achieve make the quality of capital to be better over time. : Thank you.

Thank you for your question. We are now taking our next question. The question from Steven Haywood for HSBCIB.

Good morning and thank you. Just two questions. You mentioned earlier about the liquidity the €8 billion of bond sales required to fund the collateral in the nine-month stage. Could you give a split of that between the US and the Netherlands to help with what sort of hedging policies you have in place? And also, could you tell us if there's any impact to your OCG or your operating earnings from the reduction in coupons from investment income from this bond? And then secondly, the €400 million expense savings that you have, can you tell us how much of this is for the Dutch operations please? Thank you.

Over to you question liquidity and the impact and OCG. Okay. I don't have it handy in front of me the breakdown of the liquidity needs within the Netherlands versus the US, but it would be heavily weighted towards the Netherlands in this case. But we can come back to you with more detail on that. And in terms of the impact on OCG, it does vary. So in the case of sale of let's say corporate bonds we end up with releasing required capital and that goes into OCG. However, we are losing, let's say, coupon income on that. So it is a bit of a mixed bag. It's not popping up as, let's say, in our over under OCG walk. It's not popping up on the -- on let's say, a delta. The one thing I would mention in the Netherlands is that like in the life company today we have seen an uptick in our run rate OCG. It currently stands at about €260 million, which is an increase of about €20 million from the last quarter, but that's largely a consequence of a lower UFR drag that we have seen. So it's not a part -- it's not really part of the liquidity management. It's more of a consequence of the now higher interest rates.

Okay. When it comes to the questions about expenses it's about one-third and that's in line with the size of the business that was in scope for the addressable spend base.

Yes. Thanks very much.

Thank you for your question. We are now taking our last question is from the line of Nasib Ahmed from UBS.

Good morning. Thanks for the questions. Just two for me. First one a clarification on the TLB transaction. Again just looking at that transaction the reinsurance transaction in isolation you've released €600 million of capital but wouldn't that capital be coming off TLB over time anyway? So you're saying your OCG net-net is zero if it's left pocket right pocket? But you really -- so when I think about retro transaction is kind of an acceleration of your capital generation. So just wondering at the group level what's going on? Why is there no impact -- negative impact on OCG? Maybe it's the new business. I don't think you're run of businesses here. So if you can just clarify that. And then second point on sort of the debt caring impact on the group solvency number. Is that driven by higher interest rates? And do you expect that to kind of come back over the next quarter? Thanks.

So Matt can you take both?

Yes. So on the TLB reinsurance deals so what I said is that the operating capital generation there's sort of a flip between TLB and TLA for the US business 30-30. However, the reinsurance transaction does allow us potentially to increase the level of remittances. So it creates, let's say, free cash flow more quickly than if we had left the business sitting in effectively and reviewed. So from that standpoint that's why the transaction is appealing to us. That's what we do with financial assets we try to accelerate the release of capital and that's what this -- the reinsurance transaction will do. On the debt tiering, we have seen the SCR come down from interest rates coming up and also through management actions. We've also seen that we have seen some DTA limitations in both the US and in the Netherlands. But that's -- it's sort of a regulatory issue with respect to recognizing DTAs and available capital. So we still have those DTAs. We can recapture those from the various tax authorities, but that's the limitation that we're reflecting at this point. But it's sort of a non-economic thing. Those ETAs are recoverable over time.

Thank you, guys.

Thank you for your question. We have no further questions and I will now turn the call back over to Jan Willem Weidema for closing remarks.

Thank you operator and once more apologies to everyone for the technical issues you have encountered. We conclude today's presentation and the Q&A session on behalf of Lard, Matt, Duncan and myself I want to thank you for the interaction. If you have any remaining questions then please reach us to us at Investor Relations and we're happy to tell you. Have a good day and thank you for participating in the call.