Aegon Turns To Profit In Q2

Dutch life insurer Aegon NV (AGN.L,AEG) reported that its second-quarter net result attributable to owners of the company was 842 million euros compared to a loss of 1.07 billion euros in the prior year, reflecting strong operating result and fair value gains on investments from favorable market movements.

Operating result grew to 562 million euros from 347 million euros in the prior year, with higher earnings across all segments. It was mainly driven by better claims experience in the Americas, expense savings, and increased fees due to higher equity markets. This more than offset the reclassification of the result of Central & Eastern Europe from operating result to Other income following the announced divestment of the business.

Aegon targets a dividend per common share of around 0.25 euros over 2023. It announced an interim dividend for 2021 of 0.08 euros per common share, which represents an increase of 0.02 euros compared with the interim dividend for 2020.

The company said it has made good progress on the implementation of its expense savings program, resulting in a 220 million euros reduction of annual addressable expenses through the second quarter. The strengthens its confidence in its ability to deliver on the targeted 400 million euros expense saving by 2023.

Aegon announced that it is exercising its right to redeem the $250 million floating rate perpetual capital securities with a minimum coupon of 4% issued in 2005. The redemption of the grandfathered Tier 1 securities will be effective September 15, 2021, when the principal amount will be repaid together with any accrued and unpaid interest.

After the redemption, Aegon will have reduced its gross financial leverage by about 700 million euros since the third quarter of 2020 to 5.9 billion euros. Aegon targets to reduce its gross financial leverage to between 5.0 billion euros to 5.5 billion euros by 2023.

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