AEGON LTD. Aegon trading update for first quarter 2024
- EUR 256 million operating capital generation before holding funding and operating expenses, on track to achieve guidance of around EUR 1.1 billion for 2024
- Capital ratios remain robust, above their respective operating levels
- Cash Capital at Holding remains strong at EUR 2.0 billion, reflecting 85% completion of the ongoing EUR 1.535 billion share buyback program
- Planned new EUR 200 million share buyback program announced, expected to be completed by the end of 2024
- Reporting structure of US business amended to better reflect the US strategy as set out at the June 2023 Capital Markets Day
- Continued strong sales growth in US Strategic Assets, UK Workplace businesses and Brazilian life insurance business. Positive third-party net flows at Asset Management business. UK Retail business continues to be affected by challenging market conditions
Lard Friese, Aegon CEO, commented:
"The beginning of the year was marked by continued positive commercial momentum in the US and Brazil, as well as net inflows at our asset manager, and was underscored by solid operating capital generation of EUR 256 million, as well as healthy capital ratios in our main operating units.
In the US, we continued to execute upon our strategy to transform Transamerica into America's leading middle market life insurance and retirement company. Individual Life generated new life sales of USD 119 million, an increase of 5% compared with the same period in 2023. World Financial Group's (WFG) sales force grew by 13% to almost 76,000 licensed agents, driven by continued successful recruiting and training efforts. Retirement Plans reported net deposits of USD 1.0 billion, driven by the middle market. We also continued to execute the management actions we announced last year to reduce our exposure to Financial Assets, including the repurchase of institutionally owned universal life policies and the premium rate increase program in long-term care.
Our joint venture in Brazil, Mongeral Aegon Group, continued its strong performance, with life sales increasing by 22% to EUR 28 million.
Our UK Workplace segment saw continued high levels of inflows due to the onboarding of new schemes and net deposits from existing participants, despite being negatively impacted by the loss of a low margin scheme. Performance at the UK's Retail segment continued to be impacted by reduced customer activity due to the current macro-economic environment, as well as an industry-wide reduction of transfers from defined benefit to defined contribution pension schemes.
In our asset management business, both Global Platforms and Strategic Partnerships saw net inflows. Global Platforms third party reported net inflows of EUR 2.6 billion, mostly driven by fixed income in the UK. Strategic Partnerships saw net inflows of EUR 2.1 billion, driven by Aegon's Chinese asset management joint venture.
Today, we announce a planned new share buyback program of EUR 200 million. We expect the new program to start at the beginning of July 2024, and to complete it by the end of 2024.
These results represent a good start to the year as we continue to work hard to transform our company and deliver upon our 2025 financial targets. I look forward to providing you with an update on our plans to drive growth in our UK business at our teach-in on June 25."
Strategy
Aegon is an international financial services holding company. Aegon's ambition is to build leading businesses that offer their customers investment, protection, and retirement solutions. Aegon's portfolio of businesses includes fully owned businesses in the United States and United Kingdom, and a global asset manager. Aegon also creates value by combining its international expertise with strong local partners via insurance joint-ventures in Spain & Portugal, China, and Brazil, and via asset management partnerships in France and China. In addition, Aegon owns a Bermuda-based life insurer and generates value via a strategic shareholding in a market leading Dutch insurance and pensions company.
Aegon's businesses in the US have been divided into Financial Assets and Strategic Assets. The aim is to reduce Aegon's exposure to its Financial Assets and improve the predictability of capital generation from those assets. Aegon intends to, over time, reallocate capital from Financial Assets to growth opportunities in its Strategic Assets, partnerships, and its global asset manager. Exposure to businesses outside of Aegon's core focus has been largely eliminated over recent years, most recently with the divestment of the business in India, which was completed on February 23, 2024.
Throughout its transformation, Aegon aims to maintain a solid capital position in its business units and at the Holding. Through proactive risk management actions, Aegon is improving its risk profile and reducing the volatility of its capital ratios. This is underscored by the capital strength conveyed in this press release.
The next chapter in Aegon's strategy is expected to lead to operating capital generation from its units of around EUR 1.2 billion, and of free cash flow of around EUR 800 million by 2025. Aegon aims to grow its dividend per share to around EUR 0.40 over 2025, barring unforeseen circumstances and subject to the necessary approvals. Gross financial leverage is expected to remain at around EUR 5 billion.
Share buyback program following the transaction with a.s.r.
On July 4, 2023, Aegon announced the completion of the combination of its Dutch pension, life and non-life insurance, banking, and mortgage origination activities with a.s.r., and the beginning of its asset management partnership with a.s.r. The associated EUR 1.5 billion share buyback program was 85% completed on March 31, 2023, and is expected to be fully executed by June 30, 2024. The buyback amount was subsequently increased to EUR 1.535 billion in the context of repurchasing shares related to share-based compensation plans.
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AEGON NV published this content on 16 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 May 2024 05:03:01 UTC.
