THE HAGUE (dpa-AFX) - Dutch insurer Aegon NV (AEG, AGN.L) reported Thursday a 59 percent climb in first-quarter profit boosted by fair value gains, cost reductions as well as favorable results in new markets and United Kingdom. The company also set earnings growth target for 2015 and said it plans to resume dividend payment. The shares increased around 6 percent in Amsterdam.
CEO Alex Wynaendts said, 'Following a year of considerable transformation, Aegon's businesses made a strong start in the first quarter of 2012 with solid increases in sales and earnings. Our successful efforts to reduce costs across our organization have created greater focus while also contributing to higher earnings.'
First-quarter net income attributable to equity holders climbed to 521 million euros from last year's 327 million euros. The latest quarter results included favorable fair value items of 156 million euros, compared to last year's negative 85 million euros.
Underlying pre-tax earnings increased 3 percent to 425 million euros as a decline in the Americas and Netherlands were more than offset by more-than doubled profit in United Kingdom and higher new markets earnings.
Americas was hurt by adverse mortality experience and lower fixed annuity earnings, and the Netherlands by poor morbidity experience.
In the quarter, realized gains fell 51 percent, while impairment charges dropped 34 percent to 41 million euros - the lowest level in four years.
Aegon's quarterly sales advanced 25 percent to 1.76 billion euros, driven by pension and asset management deposits.
In the quarter, life single premiums declined 33 percent to 1.16 billion euros. New life sales declined 11 percent as increased sales in the Americas were offset by lower sales in the United Kingdom and the Netherlands.
The company added that strong gross deposits in the quarter were particularly driven by pension deposits in the Americas and good performance in both the retail and institutional segments of Aegon Asset Management.
According to Aegon, its quarterly results confirm the resilience of its franchise and that the actions being pursued by management are the right ones. 'It is for this reason that we look forward to resuming a dividend payment, which will be decided during our upcoming Annual General Meeting of Shareholders,' the company added.
Looking ahead, Aegon said it aims to deliver sustainable earnings growth with an improved risk-return profile. In this regard, the company expects to grow underlying earnings before tax on average by 7 percent to 10 percent per annum between 2010 and 2015. The company also projects to increase fee-based earnings to 30 percent to 35 percent of underlying earnings before tax by 2015.
The company said it believes it can achieve these targets at the lower end of the target ranges as the economic slowdown adversely affects the company's growth potential.
Aegon will also make an application to delist its common shares from the London Stock Exchange.
In Amsterdam, Aegon shares are currently trading at 3.50 euros, up 0.19 euros or 5.71 percent.
Copyright RTT News/dpa-AFX
© 2012 AFX News
