Aegon reports first quarter 2022 results

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Algemeen advies 12/05/2022 08:59
Further progress on transforming the company and achieving financial targets

Net result increases by 7% compared with the first quarter of 2021 to EUR 412 million, reflecting a EUR 372 million book gain from the sale of Aegon's businesses in Hungary and a non-economic loss on interest rate hedges
Operating result increases by 7% to EUR 463 million, supported by an improvement in claims experience in the US, the positive contribution from growth initiatives, and increased fees from higher equity markets compared with the first quarter of 2021
Cash Capital at the Holding increases by EUR 539 million to EUR 1,817 million during the first quarter of 2022, largely driven by divestment proceeds
The capital ratios of all three main units remain above their respective operating levels. Group Solvency II ratio stands at 210%, reflecting the sale of Aegon's businesses in Hungary and the deduction of both the previously announced debt tender offer and EUR 300 million share buyback
Aegon to engage with external parties to further explore the potential for a reinsurance transaction on parts of the US variable annuity portfolio. Aegon will assess if this could be value accretive to shareholders compared with the alternative of continued full ownership and active management of a de-risked variable annuity portfolio
Statement of Lard Friese, CEO

“The first three months of 2022 have been unprecedented in many ways. The Russian invasion in Ukraine has had a devastating impact on the lives of many people and fueled inflationary pressures and volatility on the global financial markets at a time that many economies were opening up afterrelaxing COVID-19 measures. I am proud of our colleagues who continued to effectively support and service our customers in a turbulent environment as evidenced by our results, and the substantial progress we made on our 2023 strategic and financial objectives.

We continued sharpening our strategic focus and increasing our financial flexibility with the completion of the divestments of our businesses in Hungary and Turkey to Vienna Insurance Group, and the sale of part of our European venture fund. The closing of the sale of our Hungarian businesses resulted in an increase in Cash Capital at the Holding to EUR 1.8 billion. This enabled us to announce a EUR 300 million share buyback program and a further reduction of our debt, thereby reaching our deleveraging target range 1.5 years early.

Furthermore, we are maintaining a high pace in maximizing the value of our Financial Assets. We took management actions to further reduce the sensitivity of our capital position to market movements in our Dutch Life and US variable annuity businesses. The progress we’ve made so far, enables us to now engage with external parties to further explore the potential for a reinsurance transaction on parts of the US variable annuity portfolio and assess if this could be value accretive to shareholders.

As part of our strategy, we’re also reinvesting in our Strategic Assets to enhance our customer service and strengthen our ability to compete by expanding our distribution network. These investments resulted in higher sales and net deposits in our US life business, UK Retail business and the retirement businesses in our core markets. Our Global Asset Manager also continued its track record of positive third-party net deposits. In the US, we acquired TAG Resources, strengthening our competitive position in the pooled retirement plan market, which is a strategic growth driver. While COVID-19 mortality claims in the US continued to have an adverse impact, we saw our growth initiatives positively contribute to a solid first quarter 2022 operating result.

Our responsibility extends well beyond achieving attractive financial returns. In line with our purpose of helping people live their best lives, we actively contribute to help protect our environment andsociety. In February, we made a significant donation to the Red Cross to aid the victims of the hostile attack on Ukraine and excluded future investments in Russia and Belarus-based companies. We also sharpened our Responsible Investment policy to further align our investments with our net-zero carbon commitment. Transamerica introduced an innovative retirement plan that offers participants access to ESG investments. Our progress is increasingly recognized by our external stakeholders, as evidenced by the Responsible Investor of the Year award Aegon Asset Management received at the Insurance Asset Risk Awards 2022.

While global economic and geopolitical uncertainty remains, we are seeing the impact from COVID-19 subside and several central banks tightening their monetary policies to protect the economy and address rising inflation. Looking ahead, I am confident that the progress we are making on the execution of our strategy and the implementation of our operational improvement plan, as well as the actions we are taking to strengthen our balance sheet keep us on track for delivering on our strategic and financial objectives.”

Strategic highlights
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