THE HAGUE, The Netherlands,
April 11, 2016 /PRNewswire/ --
Aegon announces the sale of two thirds of its UK annuity
portfolio to Rothesay Life. The transaction is consistent with the
company's ambition to free up capital from non-core businesses.
Under the terms of the agreement, Aegon will reinsure GBP 6 billion of liabilities to Rothesay Life,
followed by a Part VII transfer. The pro forma Solvency II
ratio per end-2015 for Aegon's operations in the United Kingdom increases to an estimated ~155%
following the reinsurance transaction and ~165% following the Part
VII transfer. Aegon is exploring options to also divest the
remainder of its UK annuity portfolio.
"I am very pleased that we have reached an agreement with
Rothesay Life," said Alex Wynaendts, CEO of Aegon. "This is an
important step in the process to fully divest our UK annuity
portfolio, and will enable us to focus on our fast-growing platform
in the UK. We are confident that this transaction is also in the
best interests of our annuity customers, as Rothesay Life is an
established and respected specialist provider in the UK annuity
market."
Aegon has not been an active player in the UK annuity market
since 2010. By selling the majority of the annuity portfolio, Aegon
will be able to focus on its platform which enables workplace
savers and consumers to build their savings across their working
lives and then manage an income in retirement with the support of a
financial adviser or directly online.
As a result of the transaction, the benefit in the Solvency II
own funds from transitional measures for Aegon's UK annuity
portfolio will be reduced. After the completion of the transaction,
Aegon intends to upstream excess capital to the holding in line
with Aegon's capital management policy for its units.
Following the transaction, Aegon expects annual operational free
cash flows from its UK operations to be reduced by
approximately GBP 35 million
(EUR 43 million). The expected impact of the transaction on
2016 underlying earnings before tax is approximately GBP (20) million (EUR (25)
million). The reinsurance transaction is expected to result
in an IFRS loss of approximately GBP 30
million (EUR 37 million) to be reported in other
charges in the second quarter of 2016.
To ensure a smooth transition for its customers, Aegon and
Rothesay Life will put a migration plan in place in which the
administration of the annuity portfolio will be executed by Aegon
until the completion of the Part VII transfer.
DISCLAIMERS
Forward-looking statements
The statements contained in this document that are not
historical facts are forward-looking statements as defined in the
US Private Securities Litigation Reform Act of 1995. The following
are words that identify such forward-looking statements: aim,
believe, estimate, target, intend, may, expect, anticipate,
predict, project, counting on, plan, continue, want, forecast,
goal, should, would, is confident, will, and similar expressions as
they relate to Aegon. These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that
are difficult to predict. Aegon undertakes no obligation to
publicly update or revise any forward-looking statements. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which merely reflect company expectations at the time
of writing. Actual results may differ materially from expectations
conveyed in forward-looking statements due to changes caused by
various risks and uncertainties. Such risks and uncertainties
include but are not limited to the following:
- Changes in general economic conditions, particularly in
the United States, the Netherlands and the United Kingdom;
- Changes in the performance of financial markets, including
emerging markets, such as with regard to:
- The frequency and severity of defaults by issuers in Aegon's
fixed income investment portfolios;
- The effects of corporate bankruptcies and/or accounting
restatements on the financial markets and the resulting decline in
the value of equity and debt securities Aegon holds; and
- The effects of declining creditworthiness of certain private
sector securities and the resulting decline in the value of
sovereign exposure that Aegon holds;
- Changes in the performance of Aegon's investment portfolio and
decline in ratings of Aegon's counterparties;
- Consequences of a potential (partial) break-up of the euro or
the potential exit of the United
Kingdom and/or Greece from
the European Union;
- The frequency and severity of insured loss events;
- Changes affecting longevity, mortality, morbidity, persistence
and other factors that may impact the profitability of Aegon's
insurance products;
- Reinsurers to whom Aegon has ceded significant underwriting
risks may fail to meet their obligations;
- Changes affecting interest rate levels and continuing low or
rapidly changing interest rate levels;
- Changes affecting currency exchange rates, in particular the
EUR/USD and EUR/GBP exchange rates;
- Changes in the availability of, and costs associated with,
liquidity sources such as bank and capital markets funding, as well
as conditions in the credit markets in general such as changes in
borrower and counterparty creditworthiness;
- Increasing levels of competition in the United States, the Netherlands, the United Kingdom and emerging markets;
- Changes in laws and regulations, particularly those affecting
Aegon's operations' ability to hire and retain key personnel, the
products Aegon sells, and the attractiveness of certain products to
its consumers;
- Regulatory changes relating to the pensions, investment, and
insurance industries in the jurisdictions in which Aegon
operates;
- Standard setting initiatives of supranational standard setting
bodies such as the Financial Stability Board and the International
Association of Insurance Supervisors or changes to such standards
that may have an impact on regional (such as EU), national or US
federal or state level financial regulation or the application
thereof to Aegon, including the designation of Aegon by the
Financial Stability Board as a Global Systemically Important
Insurer (G-SII).
- Changes in customer behavior and public opinion in general
related to, among other things, the type of products also Aegon
sells, including legal, regulatory or commercial necessity to meet
changing customer expectations;
- Acts of God, acts of terrorism, acts of war and pandemics;
- Changes in the policies of central banks and/or
governments;
- Lowering of one or more of Aegon's debt ratings issued by
recognized rating organizations and the adverse impact such action
may have on Aegon's ability to raise capital and on its liquidity
and financial condition;
- Lowering of one or more of insurer financial strength ratings
of Aegon's insurance subsidiaries and the adverse impact such
action may have on the premium writings, policy retention,
profitability and liquidity of its insurance subsidiaries;
- The effect of the European Union's Solvency II requirements and
other regulations in other jurisdictions affecting the capital
Aegon is required to maintain;
- Litigation or regulatory action that could require Aegon to pay
significant damages or change the way Aegon does business;
- As Aegon's operations support complex transactions and are
highly dependent on the proper functioning of information
technology, a computer system failure or security breach may
disrupt Aegon's business, damage its reputation and adversely
affect its results of operations, financial condition and cash
flows;
- Customer responsiveness to both new products and distribution
channels;
- Competitive, legal, regulatory, or tax changes that affect
profitability, the distribution cost of or demand for Aegon's
products;
- Changes in accounting regulations and policies or a change by
Aegon in applying such regulations and policies, voluntarily or
otherwise, which may affect Aegon's reported results and
shareholders' equity;
- The impact of acquisitions and divestitures, restructurings,
product withdrawals and other unusual items, including Aegon's
ability to integrate acquisitions and to obtain the anticipated
results and synergies from acquisitions;
- Catastrophic events, either manmade or by nature, could result
in material losses and significantly interrupt Aegon's business;
and
- Aegon's failure to achieve anticipated levels of earnings or
operational efficiencies as well as other cost saving and excess
capital and leverage ratio management initiatives.
Further details of potential risks and uncertainties affecting
Aegon are described in its filings with the Netherlands Authority
for the Financial Markets and the US Securities and Exchange
Commission, including the Annual Report. These forward-looking
statements speak only as of the date of this document. Except as
required by any applicable law or regulation, Aegon expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in Aegon's expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statement is based.
Aegon's roots go back more than 170 years - to the first half of
the nineteenth century. Since then, Aegon has grown into an
international company, with businesses in more than 20 countries in
the Americas, Europe and
Asia. Today, Aegon is one of the
world's leading financial services organizations, providing life
insurance, pensions and asset management. Aegon's purpose is to
help people achieve a lifetime of financial security. More
information: aegon.com.
Media relations
Debora de Laaf
+31(0)70-344-8730
gcc@aegon.com
Investor relations
Willem van den Berg
+31(0)70-344-8405
ir@aegon.com
PRN NLD
SOURCE Aegon N.V.