Aegon to Shed 300 Netherlands Jobs in Reorganization
October 4, 2011 by N/A
| Copyright: | (c) 2011 A.M. Best Company, Inc. |
| Source: | A.M. Best Company, Inc. |
| Wordcount: | 479 |
Aegon NV said it will restructure its Netherlands operation to make the business “more agile and better positioned” to respond to changes in the Dutch market. The group said the move will make 300 jobs “redundant.”
The restructuring move is “an acceleration” of its previously announced strategic plan, said the life insurance, pension and asset management group.
“The world around us is changing rapidly,” said Marco Keim, chief executive of Aegon Netherlands and a member of Aegon’s board of management, in a statement. “To effectively respond to these developments, Aegon in the Netherlands must simplify its operations and become a more efficient organization, better able to capture the opportunities arising from changes in the market.
“Unfortunately, this means that we need to downsize our work force,” he added.
Aegon said the reorganization will cost about 60 million euros (US$81.6 million), which will be accounted for by the end of the year. The group said the reorganization will reduce costs by 100 million euros compared with the 2010 cost base. Those savings are expected to be realized in 2012.
When it released its second-quarter results in August, Aegon said the current economic environment “poses considerable challenges,” prompting a restructuring of its businesses in key markets (Best’s News Service, Aug. 11, 2011).
Second-quarter net income rose 24% to 404 million euros from a year earlier. For the first half, net income fell 7% to 731 million euros.
The group made a final repayment of its bailout funds to the Dutch state in June, as it advanced a strategy to become a leading life insurance and pensions provider in its chosen markets by 2015. Aegon said at the time that one element of its strategy is to cut costs in its established markets — in the Netherlands by 20% from a 2009 baseline by the end of 2012, and in the United Kingdom by 25% by the end of this year.
In Spain, Aegon finalized an agreement to expand its life and health insurance and pension partnership with Unnim, a banking group with 623 branches. The agreement includes the acquisition of a 50% stake in the life insurance business of Caixa Sabadell, expanding into the network of Caixa Manlleu and strengthening of Aegon’s existing partnership with Caixa Terrassa. Those three savings banks combined earlier this year to form Unnim.
In April, A.M. Best Co. affirmed the financial strength rating of A+ (Superior) and issuer credit ratings (ICR) of “aa-” of the life/health subsidiaries of Aegon NV’s U.S. operations. A.M. Best also affirmed the debt ratings of “aa-” of the outstanding notes issued under the funding agreement-backed securities programs sponsored by Monumental Life Insurance Co., a member of Aegon USA.
The affirmation of Aegon USA’s ratings reflects its favorable earnings performance and risk-adjusted capitalization during 2010, according to A.M. Best (Best’s News Service, April 27, 2011).
(By David Pilla, international editor, BestWeek: David.Pilla@ambest.com)
