FLB First Natl Bancshares Fla

Dutch insurer Delta Lloyd NV (DL.AE) Wednesday said it will slash costs by more than previously planned in a bid to uphold its growth targets amid the current market turmoil.

Delta Lloyd, which is 43% owned by the U.K.'s Aviva PLC (AV.LN), said ahead of an investor day that it now aims to reduce costs to EUR820 million in 2012, compared with earlier plans for EUR850 million, and to EUR790 million in 2013. In 2010, costs came in at EUR924 million.

Chief Executive Niek Hoek said in a statement that the extra savings, in combination with a strong capital position and robust risk management, will help Delta Lloyd achieve its growth targets. The Amsterdam-based insurer, whose rivals include ING Groep NV (INGA.AE) and Aegon NV (AGN.AE), aims to achieve 3% growth in annual operating profit and dividend payments.

Dutch insurers are tightening their belts as they seek to adapt to a radically changed market environment. After posting record profits in the years before the financial crisis, the industry is now grappling with a wide range of challenges that are denting growth prospects: a saturated market, tighter regulation and pressured capital buffers because of the ongoing market turmoil.

Analysts welcomed that Delta Lloyd is sticking to its growth targets. ING's Albert Ploegh said in a note, "[Delta Lloyd's decision] confirms our view that deteriorating investment results and higher hedging costs are being offset by additional cost savings."

Separately, Delta Lloyd said it will start a joint venture with the insurance arm of Friesland Bank NV, a small regional lender in the northern Netherlands.

At 1102 GMT, Delta Lloyd shares traded 1.5% lower at EUR11.90, slightly underperforming the midcap market in Amsterdam.

-By Maarten van Tartwijk, Dow Jones Newswires; +31 20 571 5201; maarten.vantartwijk@dowjones.com

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