Aegon sells Irish and Dutch units as Cofunds boosts results

Added 10th August 2017

Dutch insurer Aegon is selling its Irish offshore bond operation and its Netherlands-based advice business, while a strong boost in earnings from platform Cofunds, according to its latest quarterly report.

Aegon sells Irish and Dutch units as Cofunds boosts results

During the second quarter ending 30 June 2017, Aegon said it has accelerated its strategy and made three divestments.

On Thursday, the group confirmed that it will sell Aegon Ireland to AGER Bermuda, the parent company of US-based Athene Holding, which specialises in the European life run-off market.

The Dutch insurer will reportedly net about £162m ($210, €178m) from the Irish business, which provides unit-linked guarantee and offshore bond products predominately in the UK. There will be no immediate change to Aegon Ireland’s product lines.

Alex Wynaendts, chief executive of Aegon, said the company believes the change of ownership is in the best interest of all stakeholders.

"Aegon continuously reviews its portfolio of businesses in order to ensure that they fit the wider strategy of the group, and we have come to the conclusion to divest our business in Ireland.”

The group’s solvency ratio is expected to improve by around two percentage points as a result of the sale.

Dutch sale

Earlier this week, Aegon announced it has agreed to sell its independent financial advisory group, Unirobe Meeùs Groep (UMG) to Aon Groep Nederland for €295m ($347.9m).

Utrecht-based UMG provides independent advice and insurance products to approximately 580,000 retail and 75,000 wholesale customers in the Netherlands. Despite its ownership, Aegon and UMG did not have production agreements.

Wynaendts said: "This transaction should be seen in the context of the evolving insurance landscape in the Netherlands and our strategy to optimize our portfolio.

"Through this divestment, we increase our financial flexibility and it allows us to focus on those businesses that are core to our strategy.”

The sale is expected to improve Aegon’s solvency ratio by around six percentage points.

The group solvency ratio increased to 185% in the second quarter, putting it comfortably within the new target range of 150-200%, up from 140-170%.

Cofunds success

Aegon’s financial results for the second quarter of 2017, released Thursday, revealed that sales were up 25% to €7.9bn in the first half of 2017, mainly the result of a 30% increase in gross deposits to €68.8bn that was primarily driven by higher UK platform deposits boosted by the acquisition of Cofunds.

Cofunds reportedly added £29m in pension earnings in the first half of 2017, up from just £1m the previous year.

New life sales, however, declined by 8% to €224m, with lower term life and indexed universal life sales in the US and lower sales following the exit from UK annuities were partly offset by strong sales in Asia, as a result of continued strong critical illness sales in China.

New life sales were broken down as follows:

 

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About Author

Kirsten Hastings

Senior Reporter

Kirsten is a senior reporter for International Adviser, covering global news stories about the financial services industry. She joined Last Word Media in October 2015 after two years working as a reporter covering the staffing and recruitment industry. Kirsten has a Masters in Financial Journalism from the University of Stirling. 

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