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Insurer Aegon returns to profit in Q3

Aegon NV, the bailed-out Dutch insurer that owns Transamerica in the U.S., on Thursday reported a profit for the third quarter, its first since the financial crisis became most acute last fall.
/ Source: The Associated Press

Aegon NV, the bailed-out Dutch insurer that owns Transamerica in the U.S., on Thursday reported a profit for the third quarter, its first since the financial crisis became most acute last fall.

Net profit of euro145 million ($217 million) compared with a loss of euro329 million in the same period a year earlier.

The improvement was attributed to fewer losses on investments and smaller write-downs of asset values — at euro337 million, they were down from euro387 million a year ago. Aegon said losses on assets related to the U.S. housing market had eased.

In addition, several of its smaller businesses — notably pensions and asset management — swung from losses to profits.

Aegon's life insurance business, its largest, reported euro289 million in operating earnings, compared with euro214 million a year ago.

Still, analysts were unimpressed by the figures.

"Other than...some good sales numbers in the Netherlands and U.S. pensions, there is little good to say about these results," wrote KBW analyst Christopher Hitchings in a note on the earnings.

"This looks like a cheap share on the basis of embedded value or net assets, but it looks unlikely to move much further until the company can show positive earnings momentum."

Shares fell 4.9 percent to euro5.21 in Amsterdam.

By geography, Aegon has most of its operations in the United States. It said U.S. operating earnings swung to a profit of euro213 million from a loss of euro65 million.

While that was mostly due to lower losses on investments, CEO Alex Wynaendts said the company's retail life insurance sales rose 11 percent in the U.S., while pension sales were also strong.

Aegon issued euro1 billion worth of shares in August, which it intends to use to pay back a third of the euro3 billion in aid it received from the Dutch state at the height of the crisis.

Aegon said its solvency ratio — the common measure of an insurance company's health — increased to 211 percent from 194 percent in the second quarter.