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Aegon is among the latest to release an earnings report, and it’s pretty much good news for the multinational insurer.
Compared to the third quarter of 2016, Aegon saw a 31% rise in net income to €469 million (C$691 million) for the same period this year. “Higher underlying earnings, fair value items, and realised gains more than offset an increase in other charges driven by the conversion of the largest block of universal life business in the United States to a new model,” it said.
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As for total sales in the period, they reached €4.5 billion – an increase of 53% – thanks to a 65% growth in gross deposits to €40.7 billion. Aegon cited “exceptionally strong” asset management deposits, as well as strong institutional platform sales in the UK.
Meanwhile new life sales posted an 8% decline to €202 million, with the finger of blame pointed at lower sales in the US and the exit from UK annuities. Accident & health and general insurance sales dropped 17% to €180 million, also because of the US.
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“Product exits and lower supplemental health sales in the United States more than offset higher travel insurance sales,” reported Aegon. “Travel insurance sales are expected to reduce significantly as of the first quarter of 2018 as part of the earlier announced strategic decision to exit the Affinity, Direct TV, and Direct Mail distribution channels.”
Aegon’s Solvency II ratio, on the other hand, improved from 185% to 195% during the third quarter, with capital generation and benefit from the divestment of UK annuity book more than offsetting the accrual for the interim 2017 dividend.
“I am pleased that our underlying earnings are up for the fifth consecutive quarter, reflecting growth across our businesses, expense savings, and management actions taken to improve returns,” said Aegon chief executive Alex Wynaendts. “We are also reporting strong net income, despite charges related to assumption changes and model updates.”
Wynaendts added: “Our strong capital position is a clear highlight this quarter, with a significant increase in the group’s Solvency II ratio to 195%, which is now at the upper end of the target range. This enables our businesses to operate from a position of strength and underpins our target to return €2.1 billion of capital to shareholders over the period 2016 to 2018.”
Aegon, which operates in more than 20 countries, provides life insurance, pensions, and asset management.
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