Aegon Posts $533 Million Q3 Net Profit

Aegon N.V., the Netherlands-based financial group, announced that its third quarter net income was 464 million euros ($533 million), compared to 429 million euros ($493 million) in the third quarter of 2002.

For the first nine months of the year Aegon posted net income of 1.323 billion euros ($1.521 billion), an 11 percent increase over the 1.192 billion ($1.37 billion) it posted in the same period last year. Earnings were helped by a 144 million euro ($165.6 million) increase in net income from Transamerica Finance Corp., its U.S. subsidiary.

Donald J. Shepard, CEO and Chairman of the Executive Board, stated: “Our earnings for the first nine months showed growth of 11% and using constant currency exchange rates growth was up 24%. Life production for the first nine months was up 3% and up 15% using constant currency exchange rates. The agreement to divest most of Transamerica Finance Corporation’s business reinforces our focus on core activities. We continue to look for efficiency improvements to enhance our profitability.”

The announcement noted that “Net income for Transamerica Finance Corporation for the third quarter was USD 49 million (EUR 43 million) compared to USD 13 million (EUR 12 million) in the third quarter of 2002 primarily as a result of lower credit losses and higher gross margin.”

Commenting on its activities in the American market, Aegon’s bulletin stated: “Net income in the third quarter rose 25% to USD 342 million compared to USD 273 million in the third quarter of 2002. Net income for the first nine months increased 30% to USD 869 million compared to USD 666 million during the same period last year. The largest influences on earnings over the first nine months were the lower additions to the asset default provision (USD 155 million), lower DPAC amortization (USD 190 million) and lower additions to the provision for guarantees (USD 115 million), a non-recurring property insurance gain (USD 40 million) and interest on a tax refund (USD 31 million). Offsetting these influences were lower employee pension plan income (USD 64 million) lower indirect income (USD 134 million) and lower investment yield (USD 118 million).

“Traditional life production (standardized new premium) increased 8% over the first nine months of 2003 to USD 594 million. In line with second quarter 2003, strong traditional, universal and term life sales in the Agency group continue to drive sales, but were slightly offset by lower production in structured settlements as a result of the discontinuance of this product. Earnings of USD 509 million were 15% lower than the first nine months of 2002 and primarily reflect lower investment yields, reserve increases and a reduction in employee pension plan income. Indirect income was USD 33 million lower compared to the same period last year.”