Aegon narrows annual loss after redomiciling
Aegon, which redomiciled to Bermuda last year, narrowed its loss for the year in 2023 to €199 million from €990 million in the previous year.
The life re/insurer said it broke even in the second half of 2023 compared to a loss of €954 million in 2022. The loss in 2022 was largely due to charges associated with its shareholding in ASR. It sold its Dutch business to ASR in July 2023 and holds a minority stake in the life insurer.
As a result of the sale, it decided to redomicile to Bermuda where it is regulated by the Bermuda Monetary Authority.
Aegon said the second half of the year’s breakeven result saw its operating result offset but unrealised losses on the investment portfolio.
The company saw its operating profit drop 32% to €681 million “due to previously executed management actions and one-time benefits in the prior period”.
For the year, the company had an operating result of €1.5 billion, a decrease of 17% from €1.8 billion.
Lard Friese, Aegon CEO, said: “The second half of 2023 saw Aegon maintain commercial momentum, driven by the strong performance of our US business, Transamerica, as well as our UK workplace business and our joint venture in Brazil.”
He added: “Aegon’s operating capital generation (OCG) from the units of €660 million was solid during the period, bringing the total OCG for 2023 to €1.28 billion, exceeding the initial guidance for the year.
“Our business units remained well capitalised and our holding cash position continued to be robust. Free cash flow amounted to €429 million for the second half of 2023, contributing to a total of €715 million for the year, enabling us to exceed our guidance of €600 million.
“The IFRS operating result of €681 million was lower than in the second half of 2022, reflecting one-time benefits in 2022 that did not recur in 2023, as well as the impact of announced management actions in 2023. The contrasting trend in our IFRS results compared to our OCG results is caused by differences in the timing of recognition of earnings between the two frameworks. OCG continues to be the primary lens by which we evaluate business performance and steer the company.”
Friese said Aegon’s US subsidiary Transamerica “again delivered a a strong performance”.
“The Individual Solutions business generated new life sales of $486 million, an increase of 13% compared with the prior year and the highest sales level in the past eight years.
‘The number of agents at World Financial Group grew by 18% compared with a year earlier to almost 74,000. Written sales of mid-sized plans for our Workplace Solutions business amounted to $6.7 billion, an increase of 72% compared with the prior year. This was driven by growth in sales of both single employer plans and pooled plans.
“Meanwhile, we continued to actively manage our financial assets, including recent actions to reduce the exposure of Transamerica’s capital ratio to equity market movements.”
He said Aegon’s UK Workplace platform lost a large, low margin pension scheme in the third quarter but still reported positive net inflows for 2023 and expected continued net inflows as a result of the onboarding of new schemes and higher net deposits on existing schemes.
However, he added: “At the same time, both Aegon’s UK Retail platform and asset management business experienced net outflows as they were adversely affected by the macro-economic environment in 2023.”
Along its joint ventures, Aegon said new life sales at Mongeral Aegon Group in Brazil increased by 37% to €144 million reflecting both business growth and Aegon’s increased economic stake, while new life sales in China increased by 19% to €103 million in 2023.
He said: “I am very proud of everything the teams have achieved in 2023, and I am grateful for all their work during another transformational year. We will continue to work hard executing our strategy in 2024.
“Our strong commercial performance, together with the important steps we took to realign our company, have given us a solid foundation on which to sustainably grow our dividend per share.”
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