AEGON posts lower quarterly, higher annual profit

Dutch insurer AEGON n.v. on Thursday posted lower fourth-quarter earnings, but sharply higher annual net income as it restructures and focuses on core businesses.

The financial services provider, which has significant operations in northeast and southwest Cedar Rapids, recorded fourth-quarter net income of $438.6 million, down 19 percent from $541.2 million in the final quarter of 2009. For all of 2010, AEGON posted net income of $2.4 billion, compared with $281.4 million in 2009.

AEGON said it plans to sharpen its focus on the company's core businesses of life insurance, pensions and asset management. The company also plans to increase earnings from fee-based businesses and move away from spread-based income products that are subject to interest rate risk.

AEGON said it will pursue further operational and cost efficiencies by consolidating operations currently based in Louisville, Ky., with other existing locations in the United States. It also hopes to capture additional efficiencies through the consolidation and outsourcing of certain back office activities currently performed in Cedar Rapids.

Separately, AEGON on Thursday completed the issue of 173.6 million new shares of common stock. The company plans to use the proceeds of $1.3 billion to partially fund the repurchase of securities provided by the Dutch State.

AEGON on Thursday said it expects to repay all of the $4.1 billion of Dutch State aid that it received in 2008 by the end of the second quarter on June 30. That would lift restrictions on the insurer, allowing it to resume paying dividends to shareholders.