Insurer Aegon outstrips expectations with strong second quarter

AMSTERDAM (Reuters) -Aegon NV's shares jumped 6% on Thursday after the Dutch insurer reported stronger than expected second-quarter results, driven by investment gains and operational improvements as the impact of the coronavirus pandemic eased.

CEO Lard Friese said the company benefited from increased fees due to favourable equity markets, the normalisation of claims in the United States, its biggest market, and from cost savings, which all contributed to a 62% increase in the operating result.

Aegon's net result of 849 million euros ($997 million) outstripped analyst expectations of 325 million euros in a company-compiled poll and compares with a net loss of 1.07 billion euros in the same period a year earlier. The operating result was 562 million euros.

Shares traded 6.2% higher to 4.15 euros at 0745GMT.

Analysts at Credit Suisse said Aegon had produced a good set of numbers with operating performance beating consensus by 23%.

Since taking the top job in May 2020, CEO Friese has said he hopes to end years of underperformance at Aegon by cutting costs, hedging risks, and selling off businesses that are too small or have volatile returns.

"Boring is the new exciting," he said on Thursday, adding that the company had so far cut 220 million euros in costs out of the 400 million euros it is targeting by 2023.

Aegon's Solvency II ratio improved to 208% from 194% in March, with capital generation at 1.47 billion euros.

Friese said he expected the aging of populations in Aegon's biggest markets, together with continuing concerns over COVID-19, to contribute to strong life insurance and retirement product sales for the foreseeable future.

Investment gains included 468 million euros in positive asset revaluations on private equity and real estate investments in the Netherlands and the United States, as well as a well-timed hedge on interest rates put in place in March 2021.

($1 = 0.8516 euros)

(Reporting by Toby Sterling; Editing by Jacqueline Wong, Barbara Lewis and Jane Merriman)