Poor markets drag down on Aegon profits

DUTCH insurance group Aegon will give investors and analysts a clearer picture of the headwinds it faces in Europe next month, it said yesterday, as it unveiled a fall in profits amid the Eurozone turmoil.

Aegon’s chief financial officer Jan Nooitgedagt said he would outline its “sensitivities to financial markets” to investors in December, but said it was working hard to meet profit targets.

The life insurance and pensions group made €361m (£309m) pre-tax profit in the third quarter, but that slipped to €60m after it took charges on its bond portfolio.

Aegon said low interest rates meant the bonds delivered lower returns, forcing it to book a €288m charge.

“Lower equity markets and the significant drop in interest rates, as well as a further weakening of the US dollar were the main drivers to the decline in underlying earnings,” chief executive Alex Wynaendts said.

Analysts fretted that further poor performances in capital markets could cause it to experience more losses. “Given that the financial environment is tumultuous, we believe that the 2015 objectives could be impeded if the uncertainty (is prolonged),” said analysts SNS Securities in a note.

But Nooitgedagt said Aegon was determined to meet its long term profit targets.

“Let me emphasise that we are fully committed to taking the necessary strategic steps to achieve these targets,” he said.