Dutch insurer Aegon hikes capital generation target on US strength

By Gaelle Sheehan and Victor Goury-Laffont

(Reuters) -Dutch Insurer Aegon raised its annual capital generation forecast on Thursday after topping third-quarter expectations on the same metric, driven by a strong performance in the key U.S. market.

Aegon has been simplifying its corporate structure by selling Central and Eastern European businesses while focusing on its U.S. operations, mainly through the Transamerica brand that focuses on retirement solutions, investments and life insurance.

The company expects operating capital generation from its units to be around 1.2 billion euros ($1.3 billion) this year, compared with a prior target of more than 1 billion. It had previously expected to reach the 1.2 billion euro threshold in 2025.

Aegon generated 310 million euros in operating capital in the third quarter after holding funding and operating expenses, up 29% from a year earlier and well above the 212 million expected by analysts in a company-compiled consensus.

Chief Executive Lard Friese underscored “continued commercial momentum” in the U.S. in a quarterly earnings statement.

Aegon’s Americas region, which mostly consists of its U.S. business, represented two-thirds of the group’s operating capital generation in the quarter.

Its U.S. peer Metlife reported a quarterly profit beat earlier this month, as higher recurring interest margins boosted earnings from retirement and income solutions.

Aegon said it aimed to increase the headcount of its U.S. life insurance agency, World Financial Group, to 110,000 agents by 2027. It had 69,104 licensed agents at the end of the third quarter.

During an interview with Reuters, the group’s CFO, Matt Rider, attributed the decline to agents being required to pay for their own errors and omissions insurance at the half-year, pushing non-active agents to drop out in the third quarter.

“It’s a normal thing that happens in the third quarter of every year, and we’re on track to get to the 110 in the longer term”, Rider added.

In July, the Dutch group closed a 4.9 billion euro deal to sell its domestic insurance operations to ASR, which replaced Aegon as the second-largest insurer in the Netherlands.

($1 = 0.9228 euros)

(Reporting by Gaelle Sheehan and Victor Goury-Laffont in Gdansk; Editing by Milla Nissi and Christopher Cushing)

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