Significant strengthening of Dutch capital position
•Solvency II ratio of Aegon NL increases from 144% on June 30, 2017 to ~175% on a pro forma basis as a result of EUR 1 billion capital injection from the group, the sale of UMG and risk profile enhancements
•Dividends from business units and proceeds from divestments provide financial flexibility to inject capital into Dutch business. Aegon intends to issue EUR 500 million 1-year senior notes in 3Q 2017 to prefund expected cash inflows
•Loss absorbing capacity of deferred taxes factor in NL set at 75% at June 30, 2017
•Based on its solid capital position and growing capital generation, Aegon NL is expected to resume dividend payments starting with a 2017 dividend payment of EUR 100 million in 1H 2018
Group solvency ratio increases by 28%-points to 185%
•Agreement with regulator on amendment of conversion methodology for US business under Solvency II; leads to a 15% points uplift of group solvency ratio, increased comparability with peers and improvement in quality of capital
•Group solvency ratio of 185% as of June 30, 2017 – including benefit from amended conversion methodology – well within new target range of 150–200%
•On a comparable basis, solvency ratio up by 13%-points, mainly the result of divestments and capital generation
•Capital generation of EUR 0.6 billion, including EUR 0.3 billion market impacts and one-time items
•Holding excess capital increases by EUR 0.3 billion to EUR 1.7 billion, supported by regular dividends from US and CEE, and special dividend from Asia
•Interim dividend of EUR 0.13 per share. Reconfirming target to return EUR 2.1 billion of capital over 2016–2018
Net income of EUR 529 million supported by gain related to divestment
•Underlying earnings up strongly by 23% to EUR 535 million driven by improved claims experience and higher fee income from favorable equity markets. As a result, return on equity increases by 160 basis points to 8.4%
•Fair value items of EUR (191) million mainly due to adverse credit spread movements
•Gain of EUR 149 million related to divestment US run off businesses supports net income; reinsurance transaction resulted in a book loss, whereas overall result includes subsequent release of deferred gains on related derivatives
Strong sales and improved margins
•Strong institutional platform sales in the UK lead to gross deposits of EUR 35 billion; net deposits of EUR 2.3 billion driven by asset management and UK platform flows
•New life sales decline by 8% to EUR 224 million due to lower sales in US and exit from UK annuities
•Accident & health and general insurance sales remain stable at EUR 230 million
•Market consistent value of new business increases by 35% to EUR 134 million benefiting from higher interest rates
We have announced a range of measures that significantly increase our solvency ratio, including a capital injection of 1 billion euro in Aegon the Netherlands...
Alex Wynaendts Aegon CEO
“Aegon’s second quarter results are strong, and reflect the continued positive momentum in our businesses and financial markets, as well as the benefit from expense savings.
"I’m pleased that management actions are having the desired effect, particularly the marked improvement in the profitability of our US business. This improvement, together with the book gain related to the divestment of the majority of our US run-off business and related derivative positions, supports net income of 529 million euro for the quarter.
“Today, we are also announcing a range of measures that significantly increase our solvency ratio, including a capital injection of 1 billion euro in Aegon the Netherlands and agreement with our regulator on a number of outstanding solvency-related topics.
"These measures, together with the recently announced strategic divestments, increase our financial flexibility, strengthen our capital position and improve the outlook for capital generation – all of which give us confidence in our ability to return 2.1 billion euro to shareholders over the period 2016 to 2018.”
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Aegon EUR 5,183 +33,4ct vol. 23,5 milj.