Aegon NV, Europe's second-largest insurer, said yesterday that its net income rose 11.7 percent, fueled partly by its rapidly growing American operations, which are based in Baltimore.
The Dutch company made $400 million, or 758 million guilders, in the fourth quarter, which ended Dec. 31, compared with net income of $358 million, or 707 million guilders.
Net income for the full year increased 22.6 percent to $1.385 billion, or 2.748 billion guilders.
Kees Storm, Aegon's executive board chairman, said the results "demonstrate the healthy earnings capacity of our existing units."
He added that company executives "can't help being excited by the additional growth we anticipate in 1999 with the Transamerica acquisition later this year."
Aegon agreed last month to pay $10.8 billion to buy Transamerica Corp., the San Francisco insurer known for its pyramid-shaped building.
The deal would create the third-biggest U.S. life insurer when the transaction is completed this summer.
Upon completion of the acquisition, Aegon's U.S. headquarters will move to San Francisco, but few if any Baltimore employees will be affected by the relocation, a top Aegon official has said.
Aegon USA operates the Monumental Life Division and the Aegon Special Markets Group, which are based in Baltimore and employ about 800 workers.
The U.S. business is overseen by Donald J. Shepard, who is the chairman and chief executive, and a member of Aegon's executive board. Shepard will continue to live in Maryland but have an office in San Francisco. He will be president and chief executive of the merged company and run all of its U.S. insurance operations, which make up the bulk of the business.
Despite the profitable quarter, some analysts were disappointed with Aegon's results.
"Sometimes their profit is a little higher than expected, but today it was exactly at the consensus, so that was maybe a little disappointing," Nico van Geest, an analyst at SNS Securities in Amsterdam told Bloomberg News.
Aegon's operations in the Americas made $684 million for the year, up 38 percent from the same period in 1997, and represented nearly 50 percent of the company's total 1998 income.
Shares of Aegon, which trade on the New York Stock Exchange, closed at $101.625, down $1.3125.
Pub Date: 3/04/99