Aegon 2Q Net Loss Wider than Expected; Accelerating Cost-Savings Program
August 11 2016 - 2:23AM
Dow Jones News
By Ian Walker
Dutch insurance firm Aegon N.V. (AGN.AE) swung to a
bigger-than-expected second-quarter net loss on the sale of its
U.K. annuity portfolio.
The multinational life-insurance, pensions and asset-management
company, headquartered in The Hague, said low interest rates and
claims at its life and health businesses in the U.S. also took
their toll on earnings.
The insurer said it is implementing further measures to improve
profitability, including accelerating its expense-savings
program.
The company, which generates most of its income in the U.S.,
booked a loss of 628 million euros ($701.1 million) on the sale of
its U.K. annuity portfolio.
Earlier this year Aegon announced the sale of its GBP9 billion
annuity portfolio in the U.K. through two transactions, to Rothesay
Life and Legal & General Group PLC (LGEN.LN). At the time of
the deals, Aegon expected to book a loss of GBP245 million, but
raised this last month to GBP481 million blaming market turmoil
following Britain's vote to leave the European Union.
The company's solvency II ratio, a measure of financial
stability, stood at 158% on June 30. The solvency ratio is a
measure of risk that an insurer faces on claims it can't
absorb.
For the quarter ended June 30, the company made a net loss of
EUR385 million, compared with a profit of EUR319 million a year
earlier. This compares with consensus forecasts for a loss of
EUR355 million taken from the company's website and based on 15
analysts forecasts.
Underlying earnings before tax--which strips out exceptional and
other one-time items--was EUR435 million, compared with a profit of
EUR505 million a year earlier and consensus estimates of EUR481
million, also taken from the company's website and based on 16
analyst forecasts.
It has raised its dividend to 13 cents, from 12 cents for the
first half of 2015.
-Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749
(END) Dow Jones Newswires
August 11, 2016 02:08 ET (06:08 GMT)
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