Netherlands-based insurer Aegon is the latest to reveal its Q1 2020 results and the impact that the coronavirus (COVID-19) has had so far. It reported a pre-tax income of €366 million (around £320 million) for the quarter reflecting adverse mortality, as well as the impact of lower interest rates in the United States, and limited COVID-19 related non-life claims in the Netherlands.
It noted that its return on equity of 7.0% in Q1 is very unlikely to reach its annual 10% return on equity target given the pandemic. Meanwhile its Solvency II ratio increased from 201% to 208% in Q1 remaining above its target zone of 150% to 200%. This increased primarily due to normalised capital generation and, on balance, positive impact from market movements.
New life sales for the business reached €206 million (around £180.5 million) in Q1 2020, with sales in the US under competitive pressure and impacted by the phasing out of certain whole products, while sales in China benefited from a new e-commerce sales model. Accident & health insurance new premium production was €76 million (around £66.6 million) for this period, while property & casualty new premium production was €36 million (around £31.55 million).
CFO for Aegon Matt Rider highlighted the disruption that the pandemic has caused for the group’s customers, employees and the communities in which it operates, and how the uncertainty caused by the crisis makes it very difficult to provide a full assessment of COVID-19 related impacts on its medium-term targets.
“I am pleased that we have maintained a strong balance sheet and liquidity position at the group and in our main units in these extraordinary times,” Rider said. “We are taking management actions to protect the economic value of the balance sheet and our capital position, and are looking at opportunities to increase our cost efficiency. Our aim is to position the company well as we emerge from the COVID-19 crisis to ensure the best possible outcome for all our stakeholders.”
