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Aegon Q2 makes profit amid fewer one-time charges

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[August 12, 2010]  AMSTERDAM (AP) -- Aegon NV, the Dutch insurer, said Thursday it made a profit in the second quarter as its gains on investments improved and it suffered fewer losses and impairment charges than in any quarter in the past two years.

Net profit was euro413 million ($532 million), from a loss of euro161 million in the same period a year ago and up 11 percent from the first quarter.

Stripping out the impact of one-time costs and windfalls, earnings rose 26 percent before taxes to euro522 million due to the recovery in the U.S. dollar and American financial markets. Aegon does two-thirds of its business in the U.S.

Chief executive Alex Wynaendts said pension sales were strong in the U.S. and Britain. He noted that Aegon's solvency ratio slipped to 200 percent from 205 percent at the end of the first quarter.

However "it continues to provide what we consider a solid buffer," he said in a statement.

Aegon plans to sell its Transamerica reinsurance business in the U.S. as part of a plan submitted to the European Union to compensate for having received state aid to remain solvent during the financial crisis.

Wynaendts said he expected a ruling from the EU "soon" but didn't say when.

Aegon noted that new life sales were strong in the quarter, particularly in the U.S. and Britain, up 22 percent overall to euro590 million.

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Investment gains were euro148 million, from just euro21 million a year ago.

Impairment charges fell from euro394 million a year ago to euro77 million, mostly due to U.S. mortgage-related derivatives in both years.

Aegon said the current level of charges should be about normal going forward.

[Associated Press]

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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