THE HAGUE, The Netherlands,
July 12, 2016 /PRNewswire/ --
During the second quarter of 2016, Aegon announced the
divestment of its GBP 9 billion
annuity portfolio in the United
Kingdom through two transactions, to Rothesay Life and Legal
& General. Aegon today confirms that the disposals are
proceeding as planned, with the market and underwriting risks
transferred to the counter parties. In line with our earlier
communicated estimates this will lead to a total capital release of
GBP 500 million once both
transactions have been finalized through the Part VII transfers,
which are expected to be completed in the first half of 2017. The
Rothesay Life and the Legal & General transactions each
contributed 15% to Aegon UK's Solvency II ratio based on year-end
2015 and March 31, 2016 capital
positions, respectively. Whereas the absolute amount of the capital
release is unchanged, the relative impact on the Solvency II ratio
in the second quarter amounts to ~20% combined, mainly as a result
of market-driven higher capital requirements.
In finalizing the transaction agreements and as part of its
quarterly closing process, Aegon has adjusted the IFRS book loss on
these transactions. In its second quarter 2016 results, Aegon will
incur a post-tax book loss of GBP 481
million (EUR 618 million), up
from the GBP 245 million
(EUR 315 million) previously
indicated. This loss is expected to be partly offset by the release
of the expense reserves on the annuity portfolio of
GBP 70 million (EUR 82 million) post tax upon completion of the
Part VII transfers. In addition, Aegon expects to realize gains on
assets that are to be disposed of and were related to the annuity
book with an unrealized gain position of GBP
50 million (EUR 59 million)
post tax at May 31, 2016.
These are challenging times for the insurance industry, with
record low interest rates and volatile financial markets. The
divestment of the UK annuity book has significantly reduced the
exposure to these market risks.
Aegon will publish its second quarter 2016 results on
August 11, 2016 at 7.30am CET.
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
Dick Schiethart
+31(0)70-344-8821
gcc@aegon.com
Investor relations
Willem van den Berg
+31(0)70-344-8405
ir@aegon.com
PRN NLD