Aegon Revamps Loss-Making Asian Businesses
December 08 2010 - 02:39AM
Dow Jones News
Dutch life insurance and pension company Aegon NV (AGN.AE),
which generates the bulk of its earnings in mature markets in the
U.S. and Europe, will reorganize its loss-making operations in Asia
to benefit more from high growth prospects in the region.
At an investor conference in New York, Aegon said late Tuesday
its businesses in Asia will be combined in headquarters in Hong
Kong, making the operations better placed to grow organically.
Douglas Henck, who previously held several positions in Asia at
American International Group Inc (AIG) and Sun Life Financial Inc
(SLF), has been named chief executive of the new unit, the company
said.
Aegon, which is restructuring its U.K. operations and last week
said it would cut 5% of its workforce in the U.S., said the new
plans for Asia underscore its strategy to achieve a "greater
geographical balance."
The revamp comes as many of Europe's insurers are looking to
expand in Asia, where demand is growing at a fast pace as wealthier
consumers are shifting savings from cash to insurance and
investment products.
However, Aegon's operations in the region represent only a small
fraction of its total business and have made losses in recent
quarters, mainly because of higher costs related to investments in
joint-ventures in China, India and Japan.
By 2012, Aegon aims to allocate 50% of its capital to operations
outside the U.S., where it generates the bulk of its earnings
through its Transamerica operation. The main portion will go to
emerging markets in Central and Eastern Europe, Latin America and
Asia.
Aegon shares closed at EUR4.47 Tuesday.
-By Maarten van Tartwijk, Dow Jones Newswires; +31 20 571 5201;
maarten.vantartwijk@dowjones.com
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