Charge for Dutch operations slashes AEGON earnings by 51 percent

CEDAR RAPIDS - AEGON, corporate parent of Transamerica with significant operations in Cedar Rapids, posted sharply lower second-quarter earnings after taking a one-time charge to its Dutch life insurance business.

Net profit was $314 million for the quarter that ended June 30, down 51 percent from $642 million in the second quarter of 2011. AEGON took a $327 million charge to bring Dutch "unit-linked" insurance plans into line with their current value.

Netherlands-based AEGON said its underlying earnings, which strips out asset value reassessments, investment gains and other adjustments to provide a more accurate reading of the company's operating performance, rose 2.7 percent.

"We continue to see strong demand for our core products and services, particularly in the United States where increased pension sales and a number of new asset management contracts resulted in a significant increase in total deposits," said AEGON Chief Executive Officer Alex Wynaendts in a statement.

"Today's results make clear that we are making solid progress in executing on our strategic priorities and that our cost reduction programs and disciplined risk management are delivering their intended benefits."

AEGON's total sales increased 27 percent to $1.96 billion. New life insurance sales were stable as increased sales in the United States were offset by lower sales in the Netherlands and the United Kingdom.

New premium production for accident and health insurance also increased, mainly driven by strong travel insurance sales in the United States.

AEGON recorded impairment charges of $52 million, which were primarily linked to residential mortgage-backed securities in the United States.