VIDEO: Aegon CEO Alex Wynaendts Reports Increase In Earnings

 

Solid underlying earnings

Underlying earnings increase to EUR 549 million as fee business growth and the stronger US dollar were partly offset by lower US life & protection results, including adverse mortality of EUR 17 million
Equity and interest rate hedging programs main drivers of fair value losses of EUR 293 million
Net income amounts to EUR 350 million
Return on equity of 8.2% and 8.9% excluding capital allocated to run-off businesses

Continued strong profitable sales

US retirement plans and asset management main drivers behind gross deposits of EUR 16.8 billion and net deposits of EUR 3.2 billion
New life insurance sales level at EUR 518 million
Accident & health and general insurance sales stable at EUR 248 million
Market consistent value of new business of EUR 183 million impacted by low interest rates

Increase in interim dividend supported by strong cash flows

Operational free cash flows excluding market impacts and one-time items of EUR 388 million
Holding excess capital of EUR 1.5 billion and gross leverage ratio improves to 27.7%
Interim dividend increases to EUR 0.12 per share; dilutive effect of stock dividend to be neutralized
More clarity obtained on Solvency II; ratio expected to be in the range of 140 - 170%

Alex Wynaendts, CEO said, "Aegon's businesses delivered solid results this quarter, despite adverse mortality experience in the United States and the negative impact from our hedging programs on net income. At the same time, we are pleased with the high level of sales as we continue to secure new distribution agreements and reach many new customers in all our markets.

"Executing on our strategy to ensure our businesses support our long-term growth ambitions, we sold our Canadian operations as well as Clark Consulting in the US. In addition, we have further improved our risk profile by hedging EUR 6 billion of longevity reserves in the Netherlands and by reducing balances of our legacy variable annuity products in the US.

"While uncertainties on Solvency II remain, we have obtained clarity on a number of items - including treatment of the US - which allows us to tighten the range of expected outcomes. Furthermore, we have applied for the use of our internal model and are currently awaiting regulatory approval.

"I am also pleased to announce that our strong capital position and growing cash flows enable us to raise the interim dividend to 12 eurocents."