Aegon gets Dutch funding

October 29, 2008|By From Sun staff and news services

AMSTERDAM, Netherlands - Aegon NV, the Dutch insurance company whose North American headquarters is in Baltimore, said yesterday that it has taken a 3 billion-euro ($3.7 billion) investment from the Dutch government to shore up its cash position in the face of the continuing global financial crisis.

The company also said it expected to post a loss of about 350 million euros ($436 million) in the third quarter and canceled dividends and executive bonuses for the rest of the year.

"We welcome this additional capital buffer that the Dutch state has provided ... in this time of uncertainty and unprecedented economic turmoil," chief executive Alex Wynaendts said in a statement. As recently as Oct. 9, Wynaendts said Aegon could maintain its credit ratings without raising fresh capital.

The government aid is the latest of many such interventions across the United States and Europe. In Aegon's case, the question appeared to be when and how, rather than whether, it would need support. It was considered one of Europe's most vulnerable companies because it has two-thirds of its operations in the U.S., where it operates insurer Transamerica. Aegon's U.S. holdings also include Monumental Corp., a Baltimore-based life insurer it acquired in 1986. Aegon has 31,500 employees worldwide, including about 700 in the Baltimore region.

Spokesman Gregory W. Tucker called the capital infusion a positive development for Aegon amid the economic turmoil.

"It's an unequivocal message to our customers and our business partners, certainly our employees in Baltimore and elsewhere throughout the United States, that Aegon is well-capitalized with healthy cash flows, ample liquidity and is in an even stronger position to withstand any further downturns in the market," Tucker said yesterday in an interview. "We have the buffer we need and then some."

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