Netherlands-based life insurance, pensions and asset management company Aegon has entered into an agreement to sell its Canadian life insurance business to US-based life re-insurance company Wilton Re, for around C$600m (€423m).


Aegon intends to use the proceeds from the transaction to further reduce its outstanding debt.

Aegon CEO Alex Wynaendts said: "We continually review the performance of our businesses to ensure that they support our ambition to become a leader in our chosen markets.

"We have concluded that our Canadian life insurance business does not support that goal. The decision to divest these activities will lead to an improvement in the group’s return on equity of 40 basis points."

As of 30 September 2014, Aegon’s Canadian life insurance business comprises C$10.6bn portfolio of high quality assets. The assets include individual life, annuity and segregated funds policies, as well as credit insurance products.

Wilton Re chairman and CEO Chris Stroup said: "Wilton Re views the acquisition of the Transamerica Canada businesses as well-aligned with our strategy to provide risk and capital solutions to clients throughout North America."

The re-insurance company will also acquire an investment manager Aegon Capital Management and a mutual fund company Aegon Fund Management.

Subject to regulatory approval, the transaction is expected to be completed in the first quarter of 2015.

Wilton Re provides risk capital and related services, including M&A, reinsurance and longevity risk management, in the North American life insurance market.

Image: Aegon to sell Canadian life insurance business to Wilton Re. Photo: courtesy of Vichaya Kiatying-Angsulee/