New life sales drop 18% at AEGON
AEGON recorded a sharp drop in new life sales in the third quarter of 2011, compared to a year earlier.
At €405 million, sales were down 18% due to product repricing, as the Dutch insurer continued to focus on margins.
Accident & health sales increase 5% year-on-year, to €153 million, with growth mainly driven by the Americas.
Total sales increased 2% during the third quarter, to €1.6 billion, but underlying earnings before tax declined to €361 million, down 20% on Q3 2010, mainly due to lower interest rates and equity markets, unfavorable currency exchange rate movements and higher provisioning for longevity.
Underlying earnings from New Markets fell to €43 million, Central & Eastern Europe having put in a poor performance due to lower investment income and the negative impact from pension legislation changes.
Impairment charges came in at €132 million in the third quarter; in the US, impairments of €76 million were linked to residential mortgage-backed securities and in the UK to financial holdings of Portuguese and Greek banks (€22 million).
Impairments in New Markets of €29 million were largely attributable to the effect of new legislation in Hungary, related to Swiss franc denominated mortgages.
Net income for the third quarter of 2011 amounted to €60 million, down from €404 million in Q2 2011 and from €657 million a year earlier.
In the UK, the group says it is on track to implement a new operating model aimed at reducing costs by 25% by the end of this year.
The programme aims to deliver €80 million in savings and earlier this week reports emerged that the insurer plans to close its defined benefit pension scheme in the UK.
Commenting on the third-quarter results, chief executive officer, Alex Wynaendts, says: “The challenging financial market conditions clearly impacted AEGON’s earnings during the third quarter.
“Lower equity markets and the significant drop in interest rates, as well as a further weakening of the US dollar were the main drivers to the decline in underlying earnings.
“At the same time, AEGON’s capital position remained strong and our franchise continues to be resilient.
“Despite the difficult environment, we achieved record net deposits in our key growth businesses.”
Category: Companies News, Financials, Insurance News
Visited 1247 times, 2 so far today
Comments (0)
Trackback URL | Comments RSS Feed
There are no comments yet. Why not be the first to speak your mind.