Aegon Completes Taiwan Life Unit Sale

Tue. September 01, 2009; Posted: 05:47 AM

TAIPEI, Taiwan, Sep 01, 2009 (A. M. Best via COMTEX) -- AEG | Quote | Chart | News | PowerRating -- Aegon N.V. [85244] has completed the sale of its Taiwanese life insurance unit to Zhongwei Co. and reported a negative earnings impact of 385 million euros (US$552 million) for the second quarter of 2009.

The Dutch insurer said the transaction involving Aegon Life Insurance (Taiwan) Inc. [90162] will have a positive impact on future earnings. The sale has no impact on Aegon's excess capital.

In April, Aegon reached an agreement with Zhongwei, a holding company funded by a consortium led by the chairman of Meifu Development and president of Taiwan Glass Industry, to sell the unit for 65 million euros.

The decision to sell the Taiwanese life business was part of Aegon's strategic aim to optimize capital allocation and returns, said the Dutch insurer. Aegon reported a net loss of 334 million euros for the first six months of this year, compared with net income of 429 million euros the previous year (BestWire, Aug, 13, 2009).

Aegon said scheduled capital contributions to Taiwan will no longer be required and this will have an immediate positive effect on the group's cash flow. The transaction also results in a significant decrease of long-term interest exposure for Aegon, which substantially lowers required economic capital.

Established in 1993, Aegon Life Taiwan was the Dutch insurance group's first operation set up in Asia. The Taiwan operation reported a net loss of 103 million euros in 2008. It employs about 500 people and has 750 agents.

(By Iris Lai, Hong Kong bureau manager: Iris.Lai@ambest.com)

For full details on AEGON N.V. (AEG) click here. AEGON N.V. (AEG) has Short Term PowerRatings of 5. Details on AEGON N.V. (AEG) Short Term PowerRatings is available at This Link.

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