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AMSTERDAM (Reuters) – Aegon (NYSE:AEG) reported a 16% fall in third quarter operating profit on Thursday as a result of higher COVID-19 related mortality claims in the United States, the Dutch insurer’s biggest market.
The 443 million euros ($512 million) operating profit for the three months to the end of September compared with 526 million euros in the same period of 2020 and a forecast of 490 million euros in a poll of analysts compiled by Aegon.
“Performance improvements across most of our businesses … were offset by elevated mortality in the United States,” Aegon Chief Executive Lard Friese in a statement.
“We expect the impact from COVID-19 to abate over time,” Friese said, without giving further detail.
The death costs more than offset increased fee income and business growth, Friese said, adding that this underlined that Aegon was meeting other performance targets.
Aegon shares, which were up 34% this year at their 4.31 euro close on Wednesday, were 0.7% lower at 4.82% at 0817 GMT.
The Dutch insurer has been putting hedges in place around an $80-85 billion closed book U.S. annuity programme and offering certain customers a buyout to free up additional capital that analysts believe will be used for dividends or share buybacks.
Friese said the take-up rate for the offer was 8% at the end of the third quarter, but 14% as of Thursday and was expected to go beyond Aegon’s 15% target.
Aegon’s Solvency II ratio rose to 209%, up from 208% at the end of July, with capital generation at 327 million euros.
