Aegon raises new business target on margins, volumes

Aegon NV, the largest Dutch insurer after ING Groep NV, raised its value of new business target, a gauge of future sales, by 14 percent on higher margins and volumes in the Americas, Europe and Asia.

The insurer now plans to increase the value of new business to 1.25 billion euros by 2010,

The Hague-based Aegon said yesterday before an investor conference in New York. Aegon earlier wanted to double the value of new business to 1.1 billion euros by 2010 from 550 million euros in 2005.

Retiring Chief Executive Officer Don Shepard expanded Aegon through purchases and ventures in faster-growing countries such as India and Mexico while adding products in the United States and Britain.

The Dutch company said on November 8 that Chief Operating Officer Alexander Wynaendts will succeed Shepard next year.

"The underlying perfor-mance of our businesses in both our established and emerging markets continues to be strong, resulting in better-than-expected progress toward the value of new business target we announced last year" Shepard said in a statement.

Aegon didn't change its target for the Netherlands. "This market is so competitive that it's very difficult to raise the margins," Chief Financial Officer Jos Streppel said.

An increase in volumes is possible, especially in the pension business, Streppel said.

Aegon's chief financial officer also said he's feeling "comfortable" with Aegon's subprime portfolio and doesn't expect any impairments.

The insurer had no impairments on its $4.5 billion of subprime investments in the third quarter and is "confident" with its position in the "difficult" US subprime market, the company said on November 8.

The Dutch insurer agreed three months ago to buy two life insurance units from Merrill Lynch & Co for $1.3 billion to increase its US sales of variable annuities by two-thirds.

Aegon and Spanish savings bank Caja de Ahorros de Santander & Cantabria last month won European Union permission to form a partnership for life insurance and pension products.

The joint venture will sell Aegon products through Caja Cantabria's branches.

Bloomberg News

(China Daily 11/27/2007 page16)