Aegon to move domicile to Bermuda after ASR deal
Dutch life insurance giant Aegon plans to redomicile to Bermuda, although it will remain tax resident in the Netherlands and will keep its headquarters there.
The move comes after Aegon agreed to sell its Dutch life insurance business to smaller rival ASR for $5.34 billion. That deal is expected to close in the next several weeks.
Aegon’s group supervision will transfer to the Bermuda Monetary Authority as it will no longer have a regulated insurance business in the Netherlands and under Solvency II rules, its current supervisor, the DNB, can no longer remain Aegon’s group supervisor.
In a statement, Aegon said: “After consulting the members of the college of supervisors, the BMA has informed Aegon that the BMA would become its group supervisor if Aegon were to transfer its legal seat to Bermuda.”
Aegon will continue to be listed on Euronext Amsterdam and on the New York Stock Exchange.
Aegon noted that Bermuda hosts many respected international insurance companies, including four of Aegon's subsidiaries.
It said: “Bermuda’s regulatory regime is well recognised, having been granted equivalent status by the EU under the Solvency II regime, and by the UK under its own Solvency UK regime.
“It has also been designated as a qualified jurisdiction and reciprocal jurisdiction by the US National Association of Insurance Commissioners (NAIC). This enables insurance companies that are regulated by the BMA to easily conduct cross-border business.”
Lard Friese (pictured), Aegon’s chief executive officer, said: “I welcome the transfer of group supervision from the DNB to the BMA.
“Bermuda has an established, well-regarded regulatory regime that will facilitate the implementation of our strategy to build leaders in investment, protection and retirement solutions, as outlined at our recent Capital Markets Day.”
Aegon said it will continue to report under IFRS accounting standards but is exploring the implementation of US GAAP in the medium term, in addition to IFRS, so as to allow for better comparison against US peers, and provide long-term strategic flexibility for the Group.
Aegon plans to continue with a $1.63 billion share buyback programme shortly after the closing of the transaction with ASR.
It said it expects its group solvency ratio and surplus under the Bermuda solvency framework to be broadly in line with that under the Solvency II framework during a transition period until the end of 2027.
It said the method to translate Transamerica’s capital position into the group solvency position will also be similar to the current methodology. After the transition period, Aegon will fully adopt the Bermudian solvency framework.
Aegon anticipates that its debt instruments that are currently grandfathered under the Solvency II regime will remain so until the end of 2025. In addition, Aegon’s debt instruments will continue to be subject to existing triggers for mandatory deferral or cancellation of interest payments or conversion into equity, based on the group solvency ratio.
Aegon’s said its future debt structure and refinancing decisions will remain primarily driven by economic considerations, taking into account investor expectations, market circumstances, regulatory requirements, and rating agency considerations. As previously announced, Aegon intends to reduce its gross financial leverage by up to $762 million (700 million euros) following the closing of the transaction with ASR.
When the change of legal domicile becomes effective, Aegon NV will be converted into Aegon Ltd, a Bermuda entity, and all existing assets and liabilities, rights, obligations and other legal relationships of Aegon NV will remain with Aegon.
Aegon said it will continue to take into account the long-term interests of the company and all its stakeholders.
“It will apply well-recognised international governance standards to reflect the international footprint of Aegon following closing of the transaction with ASR,” Aegon said.
“The new governance includes the implementation of a one-tier board structure, consisting of both executive and non-executive directors. The governance position of, and arrangements with, Vereniging Aegon will remain materially unchanged.”
Aegon said the change in legal domicile is subject to shareholder approval at an extraordinary general meeting. It added the board of Vereniging Aegon has been informed of the intended change in legal domicile and is supportive and will seek the approval from its members for their support.
Aegon has fully owned subsidiaries in the US, UK and also owns a global asset manager. It also has partnerships in Spain & Portugal, Brazil, and China.
Aegon subsidiary Transamerica Life Bermuda serves affluent and high-net-worth individuals across Asia and beyond. TLB provides life insurance products and services through its branches in Singapore, Hong Kong and Bermuda.
Aegon had a net loss of 2.5 billion euros in 2022 compared to a profit of 1.7 billion euros, largely due to non-recurring items. It has assets of $444 billion euros and more than 20,000 employees around the world.
