Aegon 2Q Net Loss Wider than Expected; Accelerating Cost-Savings Program

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 [e-mail]; @IanWalk40289749

(END) Dow Jones Newswires

August 11, 2016 02:08 ET (06:08 GMT)

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