Life insurer and asset manager Aegon has announced its second half 2023 financial results, reporting a net result of €0 million, and a net loss of €199 million for the full-year.
At the same time, the Netherlands-headquartered insurer revealed it is planning to re-elect CEO Lard Friese for a further four years.
If re-elected, Friese, who has been Aegon’s CEO since 2020, will begin his new term after the closing of Aegon’s 2024 Annual General Meeting of Shareholders (AGM) on June 12 and run until the end of the 2028 AGM.
As part of its H2 2023, Aegon also reported an operating result of €681 million, down 32% due to previously executed management actions and one-time benefits in the prior period.
According to the insurer, this was offset by realised losses on the investment portfolio.
The insurer’s full-year 2023 operating result of €1,498 million, reflects a decrease of 17% from €1,802 million in 2022.
Lard Friese, Aegon CEO, commented: “The second half of 2023 saw Aegon maintain commercial momentum, driven by the strong performance of our US business, Transamerica, as well as our UK workplace business and our joint venture in Brazil. Aegon’s operating capital generation (OCG) from the units of €660 million was solid during the period, bringing the total OCG for 2023 to €1,280 million, exceeding the initial guidance for the year.
“Our business units remained well capitalised and our holding cash position continued to be robust. Free cash flow amounted to €429 million for the second half of 2023, contributing to a total of €715 million for the year, enabling us to exceed our guidance of €600 million.”
He added: “The contrasting trend in our IFRS results compared to our OCG results is caused by differences in the timing of recognition of earnings between the two frameworks. OCG continues to be the primary lens by which we evaluate business performance and steer the company.
“At our Capital Markets Day (CMD) in June of last year, we announced Transamerica’s strategy to become America’s leading middle market life insurance and retirement company. In 2023, Transamerica again delivered a strong performance. The Individual Solutions business generated new life sales of $486 million, an increase of 13% compared with the prior year and the highest sales level in the past eight years. The number of agents at World Financial Group (WFG) grew by 18% compared with a year earlier to almost 74,000.”
Additionally, Aegon’s written sales of mid-sized plans for its Workplace Solutions business increased 72%, to $6.7 billion, compared with the prior year. This was driven by growth in sales of both single employer plans and pooled plans.
Meanwhile, the firm continued to actively manage its Financial Assets, including recent actions to reduce the exposure of Transamerica’s capital ratio to equity market movements, the insurer explained.
Friese continued: “Our UK Workplace platform also performed well. Despite the loss of a large, low margin pension scheme in the third quarter, we reported positive net inflows for 2023 and expect continued net inflows as a result of the onboarding of new schemes and higher net deposits on existing schemes.
“At the same time, both Aegon’s UK Retail platform and asset management business experienced net outflows as they were adversely affected by the macro-economic environment in 2023.
“Moving to our insurance joint ventures: in Brazil, new life sales at Mongeral Aegon Group increased by 37% to €144 million reflecting both business growth and Aegon’s increased economic stake, while new life sales in China increased by 19% to €103 million in 2023.”
The insurer also completed 76% of its current €1.5 billion share buyback program (on February 23, 2023) and has proposed a final dividend of 16 eurocents per share. On this basis, the total dividend paid for the full-year 2023 will be 30 eurocents, in line with its target.
The CEO concluded: “I am very proud of everything the teams have achieved in 2023, and I am grateful for all their work during another transformational year. We will continue to work hard executing our strategy in 2024.
“Our strong commercial performance, together with the important steps we took to realign our company, have given us a solid foundation on which to sustainably grow our dividend per share. We also look forward to presenting the strategy for our UK business in more depth during a teach-in session on June 25 this year.”
Regarding Friese’s re-election, William Connelly, Chairman of the Board of Directors (BoD), said: “We are very pleased to nominate Lard Friese for a further term as Executive Director and CEO. Under his leadership, Aegon has embarked on a transformation with the ambition to build leading businesses in investment, protection, and retirement solutions.
“During this period, Aegon has become a more focused company with improved operational performance, a stronger balance sheet, and an enhanced risk profile. As we’ve entered the next chapter of Aegon’s transformation, the Board of Directors and I are confident that Lard, together with the Executive Committee, will deliver on the execution of Aegon’s strategy and continue to create value for customers and shareholders.”
