Path:

Aegon to sell Taiwan life business

April 22, 2009

Aegon has agreed to sell its life insurance activities in Taiwan for EUR 65 million to Zonghwei, a holding company set by a consortium led by the Chairman of property group Meifu Development and the President of Taiwan Glass Industry.

The sale will significantly reduce Aegon’s long-term interest rate risk and increase future cash flows and earnings.

CEO Alex Wynaendts said the decision to sell Aegon’s operations in Taiwan was part of the company’s strategy to “optimize capital allocation and returns”. Despite the sale, Aegon views Asia as “an important growth market,” Mr. Wynaendts said.

“We will focus our attention on further developing Aegon’s Asian platform, which we believe offers significant growth and return prospects in the coming years,” he added.

Aegon first began operations in Taiwan back in 1993, but more recently the market has proved challenging because of a structurally low interest rate environment and increased capital requirements. Aegon’s decision to sell its operations in Taiwan follows similar moves by other European insurers, including both the Dutch group ING and the UK’s Prudential PLC.

The sale will result in a total negative earnings impact of approximately EUR 400 million in the second quarter of 2009, resulting in a charge of approximately EUR 300 million to shareholders’ equity.

Aegon’s sales agreement with the consortium is subject to regulatory approval and is expected to close by the end of September this year.