AEGON´´s Executive Board Chairman, Donald J. Shepard said: 'Earnings for the third quarter were in line with our expectations. New business production increased in the US, while weak financial markets contributed to lower overall production levels in the Netherlands and the UK during the quarter. Our expense management initiatives continue to be on target.'
Earnings outlook 2002
Subject to unforeseen developments in the financial markets and within the scope of the prior forecast, AEGON expects its full year 2002 earnings to be approximately 35% lower than 2001 earnings.
Key points third quarter 2002
Â· Total annuity deposits for the third quarter increased by 44% to USD 4.1 billion. New (standardized) life production in the Americas increased 16% and decreased 17% and 19% in the Netherlands and UK, respectively. GIC production was 31% lower, while off balance sheet production of mutual funds and synthetic GICs increased 3% to EUR 4.7 billion.
Â· Premium income decreased by 4%. Adjusted for currency exchange effects, premium income increased by 2%.
Â· Bond default provisions in the USA were strengthened by USD 138 million (EUR 149 million), compared to USD 41 million in the third quarter of 2001. The balance of the USA default provisions at September 30 was USD 268 million.
Â· Provisions for variable and unit-linked products with guaranteed minimum benefits were strengthened due to declining returns on credit and equity markets. In the US this accounted for an additional provision of USD 69 million (EUR 72 million), in Canada of CAD 21 million (EUR 14 million) and in the Netherlands EUR 69 million.
Â· AEGON´´s capital position was strengthened by EUR 2,064 million as a result of paid-in capital on preferred shares previously issued to the Vereniging AEGON.
Key points first nine months 2002
Â· Total insurance premiums and deposits (excluding savings deposits) were EUR 38 billion, an increase of 6% nominally and 9% excluding currency influence.
Â· Compared to last year, results include additional USD 89 million (EUR 96 million) pretax earnings from the acquired JC Penney insurance operations.
Â· Results for the first nine months 2001 included EUR 59 million (USD 53 million) of income before tax from the divested operations in Mexico.
Â· Additions to the provisions for bond defaults in the US amount to USD 555 million (EUR 598 million) for the first nine months. Default losses charged against the provision amount to USD 585 million (EUR 630 million).
Â· Provisions for guaranteed minimum benefits were strengthened by EUR 326 million.
Â· Accelerated amortization of deferred policy acquisition costs amounted to EUR 317 million.
Â· At September 30, 2002 shareholders´´ equity totaled EUR 14,564 million, EUR 728 million lower compared to EUR 15,292 million at December 31, 2001. This largely reflects the paid-in capital on preferred shares, currency exchange rate influence and unrealized investment losses.
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