Aegon NV's net income up 16.1% in first quarter

U.S. operations generate about half of global total

premium revenue down

Insurance

May 12, 1999|By Bill Atkinson | Bill Atkinson,SUN STAFF

Aegon NV, a giant European insurance company which has its U.S. headquarters in Baltimore, said yesterday that net income jumped 16.1 percent in the first quarter, powered by higher sales of annuities and other products in the United States.

The Dutch company made $367 million, or 327 million euros, in the first quarter that ended March 31, compared with net income of $316 million, or 294 million euros, reported for the first quarter of 1998.

Shares of Aegon, which trade on the New York Stock Exchange, closed at $89.875, down $1.6875.

While Aegon sells insurance and investment products worldwide, the U.S. operations generated $171 million in profit, or about half of the company's net income in the quarter.

But total premium income from insurance products in the United States was $889 million in the first three months of the year, down 15 percent from the year-earlier quarter.

Life insurance premium income slid 20.4 percent to $568 million in the quarter, compared with $714 million in the 1998 quarter.

The decline, however, was offset by a surge in sales in the United States of nontraditional products, such as variable annuities, which shot up 38 percent to nearly $2.975 billion.

Aegon Chairman Kees Storm said the earnings were in line with expectations. "For this reason, we maintain a very positive forecast for the full year, taking into account the additional positive effect on the earnings per share that is anticipated from the planned acquisition of Transamerica," he said.

Aegon agreed in February to pay $10.8 billion to buy Transamerica Corp., the San Francisco insurer known for its pyramid-shaped building.

Upon completion of the acquisition, which is expected this summer, Aegon's U.S. headquarters will move to San Francisco, but few if any Baltimore employees will be affected by the relocation, Aegon officials have said.

Aegon USA operates the Monumental 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 officer, and a member of Aegon's executive board.

He will continue to live in Maryland but have an office in San Francisco.

Shepard will be president and chief executive officer of the merged company and run all of its U.S. insurance operations, which make up the bulk of the business.

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