PR Newswire
The HAGUE, Netherlands, May 22, 2017
The HAGUE, Netherlands, May 22, 2017 /PRNewswire/ --
Aegon has agreed to sell its two largest US run-off businesses, the payout annuity business and the Bank Owned / Corporate Owned Life Insurance business (BOLI/COLI), to Wilton Re. The transaction is consistent with the company's stated strategic objective to reduce the amount of capital allocated to its run-off businesses.
Under the terms of the agreement, Aegon's Transamerica life subsidiaries will reinsure USD 14 billion of liabilities to affiliates of Wilton Re US Holding Inc. The transaction and related management actions are expected to result in a capital release of approximately USD 700 million (EUR 630 million) in 2017.
"I am very pleased that we have reached an agreement to divest the majority of our US run-off businesses," said Alex Wynaendts, CEO of Aegon. "This transaction is in line with our strategic objective of accelerating the release of capital allocated to these businesses and will further enhance the financial flexibility of the group. We are confident that this agreement is also in the best interests of our customers, as Wilton Re is a highly respected reinsurer in the market."
Group Solvency II ratio improves by 6%-points
As a result of the actions announced today, Aegon's Group Solvency II ratio is estimated to improve by approximately 6%-points in the second half of 2017. After completion of the transaction and the related management actions, the capital released from this transaction is expected to be upstreamed to the holding, which will improve Transamerica's return on capital by approximately 60 basis points.
Aegon expects annual capital generation from its US operations to be reduced by approximately USD 30 million (EUR 27 million) following the transaction. As the businesses are classified as run-off businesses, their associated earnings are not included in underlying earnings before tax. Aegon anticipates the reinsurance transaction will result in a book loss of approximately USD 300 million (EUR 270 million), to be reported in Other Charges at the time of closing. The transaction is subject to normal regulatory approvals and is expected to close in the summer of 2017.
About Aegon
Aegon's roots go back more than 170 years - to the first half of the nineteenth century. Since then, Aegon has grown into an international company, with businesses in more than 20 countries in the Americas, Europe and Asia. Today, Aegon is one of the world's leading financial services organizations, providing life insurance, pensions and asset management. Aegon's purpose is to help people achieve a lifetime of financial security. More information on aegon.com/about.
About Wilton Re
Wilton Re is a leading provider of In Force Solutions. Focusing on the North American life insurance market, the Company provides risk capital and related services including M&A. Their administrative capabilities provide the industry with efficient and effective runoff management of legacy blocks of life insurance and annuity contracts.
The Company also partners with companies to implement new business strategies for middle-market sales, with an emphasis on worksite, senior market and simplified term products. Wilton Re offers fully customized solutions that include private labeling with supporting delivery and administrative systems.
Wilton Re is committed to creating solutions that enhance value for its clients, their policyholders and shareholders. Their approach is centered on building lasting relationships with our business partners and sharing resources, industry knowledge and experience in an open, transparent manner.
To find out more about the Wilton Re group of companies, please go to http://www.wiltonre.com, http://www.texaslife.com and http://www.ivari.ca.
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Disclaimer Forward-looking statements
The statements contained in this document that are not historical facts are forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995. The following are words that identify such forward-looking statements: aim, believe, estimate, target, intend, may, expect, anticipate, predict, project, counting on, plan, continue, want, forecast, goal, should, would, is confident, will, and similar expressions as they relate to Aegon. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Aegon undertakes no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which merely reflect company expectations at the time of writing. Actual results may differ materially from expectations conveyed in forward-looking statements due to changes caused by various risks and uncertainties. Such risks and uncertainties include but are not limited to the following:
Further details of potential risks and uncertainties affecting Aegon are described in its filings with the Netherlands Authority for the Financial Markets and the US Securities and Exchange Commission, including the Annual Report. These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, Aegon expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Aegon's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Contacts
Media relations
Debora de Laaf
+31(0)70-344-8730
gcc@aegon.com
Investor relations
Willem van den Berg
+31(0)70-344-8405
ir@aegon.com
SOURCE Aegon N.V.
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