AEGON reports lower quarterly profit
May 17, 2016 by George C. Ford
Volatile financial markets had a negative affect on first-quarter net income for AEGON, Netherlands-based corporate parent of Transamerica in Cedar Rapids.
The multinational life-insurance, pensions and asset-management company on Thursday posted a net profit of $162.7 million for the quarter that ended on March 31, down 50 percent from $328.9 million in the same quarter of 2015. Underlying net earnings, which strip out exceptional and other one-time items, were $527.6 million in the first quarter of 2016, up from $491.6 million in the same period last year.
Sales rose 36 percent to $4.1 billion in the quarter that ended on March 31 from $2.99 billion in the first quarter of 2015
New life insurance sales were down 11 percent in the first quarter to $302.7 million, driven by lower sales in Asia and Poland. Accident, health and general insurance sales slid 15 percent to $325.5 million, mainly due to lower sales in the United States.
AEGON previously set a 10 percent return-on-equity target by 2018. It expects to achieve that target by reducing annual operating expenses by $228 million by the end of 2018, as well as an extra $57 million a year of investments in digital capabilities and expertise.
“By transforming our businesses, we aim to become a more cost-effective organization, while continuing to grow and diversify our customer base across all our markets,” AEGON Chief Executive Alex Wynaendts said in a news release. “This is leading to very strong deposits, especially in our fee-based retirement plan and asset management businesses.”
AEGON’s solvency II ratio, a measure of financial stability, stood at 155 percent on March 31. The solvency ratio is a measure of risk that an insurer faces on claims it cannot absorb.
“Our Solvency II ratio remains well within our target range, and also reflects the impact of the full share buyback and anticipated payout of the final dividend,” Wynaendts said.
