Dutch insurance company Aegon has reported a 32% increase in net income for the first half of the year as a result of healthy growth from its life insurance business, expansion in eastern Europe and China and a very strong second quarter.
Net income in the first six months increased 32% to E1,426 million, while net income improved by 71% to E760 million in the second quarter of 2005. Standardized new life production increased 16% to E1,342 million in the first six months of 2005 and 29% in the second quarter to E732 million.
New life production in the Americas increased 13%, primarily reflecting strong Bank-Owned Life Insurance / Company-Owned Life Insurance (BOLI/COLI) production during the first quarter, continued strong traditional and Universal Life (UL) sales in the Agency channel and increased reinsurance sales.
The Netherlands saw a solid improvement in group pension business in the first quarter, driving the increase in life production for the first six months. Life production in the UK decreased during the first six months, as first quarter production was affected by certain pricing and other changes in the core pensions markets. However, the second quarter showed a solid pick up in UK life production.
Taiwan experienced exceptionally strong growth in life production, particularly in the second quarter, due to increased sales of traditional life products, which is unlikely to be repeated in the second half of the year.
Aegon also gained from a strong return from its investments, which increased almost six times to E546 million in the second quarter.
We are pleased to report a significant increase in life production and the continued strengthening of distribution during the first half of this year, said Aegon chairman Donald Shepard.
The announced acquisition in Poland marks another important step in our growth strategy for Central and Eastern Europe. We also achieved further expansion in China with the opening of our Beijing branch and the new license in Nanjing. The progress that we have made across our businesses so far this year indicates that our strategy for growing Aegon’s core business profitably is on track.