Aegon expects 1.2-bln-euro loss for last quarter
Three months after receiving a huge boost, Aegon reports colossal losses.
THE HAGUE— Dutch insurer Aegon projected on Tuesday a net loss of 1.2 billion euros (1.5 billion dollars) for the last quarter of 2008, three months after receiving a three-billion-euro cash boost from the state.
Releasing its preliminary quarterly results, the company blamed the "underperformance" of investments, a decline in equity markets and lower interest rates, and said it would scale back some business units.
"The measures the company is taking will help counter the effects of the global crisis on its businesses," Aegon said in a statement.
"These measures include a scaling-back of Aegon's institutional markets operations in the United States."
Aegon's fourth-quarter forecast was worse than a loss of 643 million euros forecast by analysts questioned by news agency Dow Jones.
In 2007, the company had posted a fourth-quarter net profit of 648 million euros, and 2,55 billion for the year.
But as the global credit crunch unfolded, the company reported a 58-percent slump in second quarter net profit in 2008, and a 330-million-euro loss for the third quarter.
The company suffered exposure to US financial groups that found themselves in trouble — including a 500-million-euro exposure to insurer AIG, 125 million to Washington Mutual and 265 million to Lehman Brothers.
In October, it received three billion euros from the Dutch state.
On Tuesday, Aegon said its core business remained healthy, announcing fourth quarter new life policy sales of 600 million euros.
"Total gross deposits reached 12 billion euro, thanks in part to another sharp rise in fixed annuity sales. Net deposits reached 1.7 billion euros."
The insurer said it would free up capital to the value of 1.5 billion euros in 2009, and achieve cost savings of 150 million euros.
Spokesman Willem van den Bergh said this would include "tens" of job cuts in the United States, but "no major job losses."
The company expected to have total impairment charges of about 500 million euros for the quarter.
Aegon employs nearly 32,000 people and has some 40 million customers world-wide.
Its share value fell 2.85 percent on the Amsterdam stock exchange shortly after opening to 3.61 euros.