Aegon increases operating capital by 16%

Aegon, which moved its domicile from the Netherlands to Bermuda in September, said it increased its operating capital by 16% to €354 million in the third quarter and said its US and Brazilian businesses performed well in the period. 

 The life insurer and asset manager said the capital ratios of the company’s main units remained above their operating levels while cash capital at the holding company rose to €2.9 billion, although this was largely driven by the sale of its Dutch business to ASR in July.  

He company said it had strong sales growth in its US strategic asset and in its life insurance business in Brazil. 

“Sales momentum in asset management and UK Retail businesses continues to be affected by challenging market conditions,” the company said. 

Lard Friese, Aegon CEO, said: “For the third quarter in a row, we saw continued commercial momentum in the US and strong overall operating capital generation which benefited from exceptional items. 

“We expect the full-year 2023 operating capital generation from the units to be around €1.2 billion; up from the previous guidance of more than €1 billion. I am proud of what the teams have achieved so far and would like to express my gratitude to my colleagues for all of their hard work.”

He added the company is focused on ensuring its US business, Transamerica, reached its full potential.

“ In the third quarter, Transamerica’s Strategic Assets have continued to deliver growth,” he said. “Individual Solutions generated new life sales of USD 118 million, an increase of 10% compared with the prior year period. 

“World Financial Group’s (WFG) sales force grew by 17% compared with a year earlier to almost 70,000 licensed agents. Workplace Solutions more than doubled its written sales of mid-sized retirement plans to $1.8 billion compared with the same period last year. 

“We expect that this progress in the middle market will translate into higher gross deposits in the coming quarters. These are important achievements in our ambition to build America’s leading middle market life insurance and retirement company.”

He added: “Our joint venture in Brazil, Mongeral Aegon Group, also delivered strong growth, with new life sales almost doubling to EUR 49 million compared with the year ago period. This follows our recent investment that increased Aegon’s economic ownership of Mongeral Aegon Group to almost 60%.”

However, Friese said the company’s UK business was struggling. 

“Results at Aegon’s UK retail business continued to be affected by reduced customer activity because of the current macro-economic environment, as well as an industry-wide reduction of transfers from defined benefit to defined contribution pensions,” he said. “Our UK Workplace segment saw continued high levels of inflows due to the onboarding of new schemes and higher net deposits on existing schemes. However, these were more than offset by the departure of a large, low margin pension scheme.

“While results at Aegon Asset Management (Aegon AM) continued to be affected by adverse investor sentiment across the industry, we did see positive net flows at our Chinese asset management partnership. 

“We are adapting to the reality of current market conditions and have taken cost reduction measures in our Global Platform business that we expect will improve Aegon AM’s performance. In addition, as a result of its asset management partnership with a.s.r., Aegon AM has further strengthened its leading positions in Alternative Fixed Income and Retirement Investment Solutions in the Netherlands.”