Aegon returns to profit in Q4 despite paying back some bailout money

Insurer Aegon reports profit in Q4

AMSTERDAM — Aegon NV, the bailed-out Dutch insurer, reported a return to profit in the fourth quarter due to gains on investments that previously made losses, a better operating performance and fewer impairments on assets.

Net profit was €393 million ($530 million), compared with a loss of €1.18 billion in the same period a year ago, during the financial crisis.

In the Americas, where Aegon does more than half its business and owns the Transamerica company, operating profits were €201 million, from a loss of €1.17 billion in the fourth quarter of 2008.

“The improvement was due mainly to the recovery in financial markets,” which helped both investment performance and fee income, Aegon said.

Companywide operating earnings were €253 million, versus a loss of €951 million in 2008.

The results showed “a return to profit, reduced expenses and continued customer confidence” that led to higher insurance sales in all the company’s markets, it said.

Aegon cut around 7 percent of its work force during the year and now employs around 25,000.

The company booked €324 million in gains on its investment portfolio, up from €136 million a year earlier.

In addition, Aegon reported €209 million worth of impairment charges on U.S. housing-related assets and securities issued by British banks, down from €501 million in such impairments a year ago.

During the quarter Aegon repaid €1 billion in bailout money to the Dutch state, a third of the €3 billion it received in the fall of 2008.

The company said that by preserving cash it has increased its solvency ratio — a common way to measure the financial health of insurers — to 204 percent from 183 percent a year ago.

But Aegon said Thursday it still wants to preserve cash and is not prepared to pay a dividend.