Aegon H1 earnings miss forecasts, cuts dividend on US coronavirus woes

[AMSTERDAM] Dutch insurer Aegon reported lower than expected first-half earnings on Thursday as the coronavirus pandemic led to higher mortality and lower interest rates in the United States, where it does two-thirds of its business.

The company also withdrew its financial guidance for this year and next, citing an uncertain economic outlook. It said it would provide new targets at its capital markets day in December.

New Chief Executive Lard Friese introduced a number of measures to preserve capital at Aegon, whose performance has been weak for years, and said he would be reviewing some of its operations.

The company reported underlying pre-tax earnings of 700 million euros (S$1.13 billion) for the first half, down 31 per cent from 1.01 billion euros in the same period of 2019, with 202 million euros in net income.

Analysts in a company-compiled poll had forecast on average underlying pre-tax earnings of 753 million euros, with net income of 262 million euros.

Mr Friese, who left competitor NN Group to take the top job at Aegon in May, said he intends to transform the company into one with reliable results.

"I realise this is not where the company is today and it will take time to get there," he told reporters.

Aegon will now cut its interim dividend to 6 US cents from 15 US cents. He said the company would use any cash for the time being to reduce leverage and strengthen the balance sheet.

The company reported on Thursday solvency had declined to 195 per cent from 201 per cent at the end of 2019.

Its US arm, operating largely under the Transamerica brand, will retain its profit in the second half rather than contributing it to the overall group earnings pool, it said.

Mr Friese announced a review of operations in several countries outside of core markets in the United States, Britain, and the Netherlands.

REUTERS