U.S. branch helps Aegon's profits soar Dutch insurer credits sales, acquisition

Insurance

May 15, 1998|By Bill Atkinson | Bill Atkinson,SUN STAFF Bloomberg News contributed to this article.

Dutch insurer Aegon NV, which has its U.S. headquarters in Baltimore, said yesterday that its net income rose 46 percent in the first quarter fueled by an acquisition and strong performance in the Americas.

Aegon reported net income of $316 million, or 648 million guilders, for the first quarter that ended March 31, compared with net income of $216 million, or 403 million guilders for the same period a year ago.

The company made $1.09 a share in the quarter, up 33 percent from the 82 cents made in the 1997 quarter.

"Beautiful figures," said Joof Verhees, head of equity trading at Rabo Securities. He said Aegon shows "fantastic profit growth year after year after year."

Aegon's shares, which are traded on the New York Stock Exchange, fell $3.312 to close at $134.187. At the company's annual meeting yesterday, shareholders voted to approve a 2-for-1 stock split, and the company said it will pay a final dividend payable in cash or stock June 5.

Net income was boosted by Aegon's acquisition of Providian Corp., and by strong performance from insurance sales in the U.S. and Latin America.

Aegon acquired Providian's insurance business in June 1997 for $3.5 billion, and its operations have been folded into Aegon USA in Baltimore.The acquisition of the Louisville, Ky., company has nearly doubled Aegon USA's assets.

Aegon USA operates Monumental Life Insurance Co. and the Aegon Special Markets Group, both in Baltimore, and has more than 10,000 employees nationwide.

The U.S. operations are overseen by Donald J. Shepard, who is the chairman and chief executive, and a member of Aegon's executive board.

Aegon NV Chairman Kees Storm said the company is having a "very good start for 1998."

"The effect of the Providian acquisition last year will, of course, have less impact on our overall growth figures beginning in the third and fourth quarter of this year."

The company benefited from strong growth in sales of life and health insurance as well as annuities in Latin and North America.

Profit before taxes in the Americas, now Aegon's largest area of operation, totaled $232 million, more than double the profit for the same period a year ago, the company said.

Aegon expects continued growth throughout the year, and it has revised its earnings forecast. It expects net income to grow by 25 percent for the year, up from its original estimate of 20 percent.

Pub Date: 5/15/98

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