“We are pleased to have reached a good agreement for our customers”, said Marco Keim, member of Aegon’s Management Board.
Aegon has reached a final agreement with Stichting Verliespolis and Stichting Woekerpolis Claim to reduce charges for customers of its unit-linked insurance policies in the Netherlands. The agreement is part of industry-wide efforts in the Netherlands to address concerns over charges related to unit-linked insurance products.
Aegon previously announced improvements to such policies last September. Based on the information available at that time, the company estimated the cost at approximately EUR 140 million before tax. Under the final agreement announced today, Aegon will commit an additional maximum amount of EUR 110 million before tax to improve terms and conditions of its unit-linked policies, which includes a maximum of EUR 80 million before tax to assist those customers experiencing adverse financial circumstances.
As a result of the final agreement, there will be an additional impact on the company’s embedded value of approximately EUR 70 million after tax. The cost of improvements will be reflected in Aegon’s earnings over the remainder of the lifespan of affected policies. Consequently, Aegon expects no significant impact on its 2009 income statement as it has adequate provisions.
The final agreement is the result of several months of negotiations between Aegon and organizations in the Netherlands representing the interests of customers. These organizations will be involved in supervising the implementation of the agreement.
“We are pleased to have reached a good agreement for our customers”, said Marco Keim, member of Aegon’s Management Board. “The Dutch Financial Service Ombudsman has examined the Aegon agreement and confirmed that it is fully in line with his Recommendation and consistent with prior agreements of other insurance companies”.
Before this agreement, Aegon had made substantial improvements by reducing costs and premiums for its unit-linked insurance products in the Netherlands. These previous improvements, introduced over a number of years, are valued at approximately EUR 380 million before tax. Aegon’s unit-linked portfolio consists of 1.3 million policies, of which 50% have a guaranteed minimum return.