Insurer Aegon books $400 million hit from higher US mortality

By Olivier Sorgho and Dimitri Rhodes

(Reuters) – Dutch insurer Aegon booked a charge of around $400 million in the first half of 2024 to reflect higher death-related insurance claims in its key U.S. market, it said on Thursday.

“We expect that many people had, during the COVID years, not sought medical treatment, and we’re seeing the effects of that now, an increased environment for increased mortality,” finance chief Matt Rider, who will retire at the end of this month, told Reuters in an interview.

He said Aegon expected the situation to continue in the medium term, after high mortality in the U.S. hit its capital generation and operating result in the first half of the year.

Its shares were down 6% by 1055 GMT.

Half-year operating capital generation before holding funding and operating expenses fell 5% to 588 million euros ($655 million), but beat analysts’ consensus of 551 million euros.

Analysts at Barclays and J.P.Morgan called the results mixed, after operating profit also fell 8% to 750 million euros. Barclays said the capital generation beat was largely due to one-offs.

Commercial performance in the U.S. was still strong, which along with the charge booked in the first half allowed Aegon to upgrade its second-half operating profit guidance to 800-900 million euros, Rider said during a call with analysts.

Aegon has been selling assets in Europe to sharpen its focus on the U.S. market, where it aims to make its Transamerica unit the country’s leading middle-market life insurance and retirement firm.

The Amsterdam-listed life insurance, pension and asset management company posted net deposits of 8 billion euros in the Global Platforms and Strategic Partnerships business areas under its asset management division, compared to an outflow last year.

The business continued to benefit from asset management with ASR Nederland, in which Aegon owns around 30% after it sold its Dutch operations to its smaller rival last year.

($1 = 0.8975 euros)