Acquisition, life insurance boost Aegon's profits 26.2% Dutch firm has its U.S. base in Baltimore

November 14, 1997|By Bill Atkinson | Bill Atkinson,SUN STAFF

Aegon N.V., the large Dutch insurance company with its U.S. headquarters in Baltimore, said its third-quarter profit jumped 26.2 percent, fueled by an acquisition, big gains from its North American operations and a growing life insurance business.

Aegon reported net income of $294 million, or 594 million guilders, for the quarter ended Sept. 30, compared with net income of $233 million, or 389 million guilders for the corresponding quarter a year earlier.

The company's net income per share in the 1997 quarter was $1.02, compared with 88 cents a year earlier.

"The numbers look terrific all around," said Jason B. Zucker, an insurance analyst with Bear, Stearns & Co.

For the first nine months of the year, Aegon's net income rose 17.5 percent to $772 million, or $2.80 per share, from a year earlier.

Aegon's shares, which are traded on the New York Stock Exchange, rose $2.438 to close at $80.563.

The company also has proposed a 2-for-1 stock split, which will be voted on at the May stockholder's meeting.

Aegon Chairman Kees Storm said the performance surpassed expectations. "This reflects the enhanced performance of our existing operations and the inclusion of Providian."

Aegon N.V. acquired the Louisville, Ky.-based life insurer Providian Corp. last summer for more than $3.5 billion. Insurance industry analysts called it the biggest U.S. life insurance acquisition ever.

Providian was folded into Aegon's Baltimore-based subsidiary, Aegon USA. The acquisition nearly doubled Aegon USA's size in assets.

Aegon USA operates Monumental Life Insurance Co. and Monumental General Insurance Group, both in Baltimore, and it had 5,500 employees nationwide before the Providian merger. Today, the company has 11,000 employees.

Aegon's North American region sizzled. It had favorable claims experiences, higher investment spreads and increased business volumes.

In the first nine months of the year, gross premium income from the region jumped 46 percent to $2.4 billion. Assets held for the account of policyholders grew 19 percent, and income before taxes rose nearly 40 percent to $436 million.

Pub Date: 11/14/97

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