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Aegon reports 27% increase in Q4 net underlying revenue

IBR Staff Writer Published 20 February 2017

Dutch insurance company Aegon has reported a 27% increase in net underlying revenue before tax to €554m for the fourth quarter of 2016, compared to €435m for the same period in 2015.

Its net income in Q4 2016 was €470m in comparison to €580m loss in the same period last year.

Aegon saw a 6% decline in sales to €2.7bn in Q4 2016 from the figure of €2.9bn reported in Q4 2015.

The company's growth in its underlying earnings has been attributed to its robust expense management, higher interest rates and enhancement in claims experience in the US.

Aegon CEO Alex Wynaendts said: "During 2016, we made good progress in the execution of our strategy by growing our business, realizing major expense savings and increasing our returns. At the same time, we continued to invest in our digital transformation and enhance the customer experience.

"I am especially pleased that we concluded the year with strong fourth quarter earnings, which increased as a result of successful expense reductions, improved claims experience and growth in fee-based revenues."

In Americas, the underlying Q4 2016 earnings surged 33% to €388m from €291m in the same period in 2015. As per Aegon, the increase in earnings in this region was driven by favorable morbidity experience of worth €31m as well as €18m coming through positive adjustment to intangible assets by hiking interest rates.

In Europe, underlying earnings in Q4 2016 grew 23% to €174m from €142m recorded in the same period in 2015. As per Aegon, decreased amortization of deferred policy acquisition costs (DPAC) in the UK after the write down of DPAC associated to upgrading customers to the retirement platform in Q4 2015 had driven the growth in Q4 2015 earnings.

In Asia, Aegon’s a positive impact of €7m through higher interest rates saw the underlying earnings before tax grow to €13m from €3m in the same period in 2015.

The company has declared a final dividend of 13c per share following the Q4 2016 results.

Image: Alex Wynaendts, CEO and Chairman of Aegon's Executive and Management Boards. Photo: courtesy of Aegon.