(Reuters) – Aegon shares fell on the stock market on Thursday after the Dutch insurer posted a solvency ratio at the end of June below expectations, as well as a net loss in the first half.
On the Amsterdam Stock Exchange, around 11:10 a.m. CET, the stock fell 3.5%, the lowest in five months.
The group’s solvency ratio fell from 210% at the end of March to 202% at the end of June, below the 208% expected by analysts, according to a consensus provided by Aegon. The net loss in the first half amounted to 199 million euros, against a profit of 46 million euros the previous year.
In a note, KBC Securities said one-time items in the US and the negative impact of pricing limits were the main drivers of the decline. KBC attributes Aegon’s net loss to the impact of US investments and assumption updates.
“Financial results are somewhat mixed, with strong capital generation, although cash capital and solvency position are weaker than expected,” KBC added.
In a call with company executives, analysts raised concerns about a 30% drop in the company’s contractual service margin (CSM) at the end of June, which represents profits that the entity will only recognize once the insurance service has been rendered.
The CSM fell to 8.30 billion euros, against 11.88 billion euros a year earlier.
“The magnitude of the move appears significant,” KBW analysts note in a note. “It would be interesting to see how ad hoc some of these elements are.”
(Report Laura Lenkiewicz, written by Augustin Turpin, edited by Kate Entringer)
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