Aegon has reported its results for the first half of 2024, showing a net loss of €65 million.
The company’s operating result decreased by 8% compared to the first half of 2023, amounting to €750 million, primarily due to unfavourable mortality experience related to US financial assets and the impact of assumption updates.
Shareholders’ equity per share declined by 6% compared to December 31, 2023, to €4.02, while the Contractual Service Margin (CSM) per share, after estimated tax adjustment, increased by 14% to €4.17.
In terms of capital management, Aegon's operating capital generation before holding funding and operating expenses dropped by 5% to €588 million, reflecting the challenging mortality experience in the US.
Net loss aside, the company said that it remains on track to meet its 2024 guidance. Capital ratios for Aegon’s main units have increased and continue to stay above their respective operating levels.
Cash capital at the holding level remained above the operating range at €2.1 billion. Aegon completed a €1.535 billion share buyback program in June 2024 and initiated a new €200 million share buyback program in July, expected to be completed in the second half of 2024.
Free cash flow stood at €373 million, which includes the 2023 final dividend from a.s.r. The 2024 interim dividend has been set at €0.16 per common share, an increase of €0.02 compared to the 2023 interim dividend.
Aegon CEO Lard Friese highlighted the company’s progress in executing its strategy to position itself as a leading provider of investment, protection, and retirement solutions. This progress was reflected in continued strong sales growth across Aegon’s US strategic assets, further expansion of its UK workplace platform, growth in Brazil, and strong net deposits in its asset management business.
Friese also noted a reduction in capital employed by US financial assets, with a decrease of $0.4 billion, keeping the company on track to reduce this to €2.2 billion by the end of 2027.
While the unfavourable mortality experience in the US negatively impacted both IFRS results and operating capital generation, Friese said that the company remains on track to meet its operating capital generation guidance of €1.1 billion for 2024. The company expects that the assumption updates will help reduce IFRS claims experience variances and improve operating results.
Capital ratios for Aegon’s US and UK business units increased to 446% and 189%, respectively, and the holding cash position remained above the operating range at €2.1 billion.
In the US, Transamerica saw a 5% increase in Individual Life new sales, reaching $245 million. World Financial Group’s sales force grew by 13% to nearly 79,000 licensed agents. Net deposits for mid-sized retirement plans increased to $1.2 billion, contributing to a 12% rise in US Strategic Assets CSM.
In the UK, Aegon’s workplace platform saw net deposits increase to £1.7 billion due to the continued onboarding of new schemes and higher net deposits on existing schemes. However, the Adviser platform experienced net outflows of £1.8 billion, reflecting reduced customer activity due to the macroeconomic environment and consolidation in non-target adviser segments.
Aegon’s global asset management business reported strong commercial results, with third-party net deposits in Global Platforms and Strategic Partnerships totalling nearly €8 billion, reversing outflows seen in the previous year.
In Brazil, Mongeral Aegon Group, Aegon’s joint venture, continued to grow with life sales increasing by 9% to €64 million, driven by Aegon’s increased economic stake and ongoing business growth in both group and individual products.
These results have provided a foundation for Aegon to raise its interim dividend to 16 eurocents per share, an increase of 2 eurocents from the 2023 interim dividend. The company also completed a €1.535 billion share buyback related to the transaction with a.s.r. and commenced a new €200 million share buyback in the last quarter.
“I am grateful to the teams for what they have achieved during the first half of the year, and we will work to build on that momentum in the second half as we continue the execution of our strategy,” Friese said.
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