AMSTERDAM (Reuters) – Dutch insurer Aegon’s <AEGN.AS> capital position weakened in the first half of the year because of low interest rates and other unfavourable market developments, it said on Thursday.
Aegon’s solvency rate under Europe’s new Solvency II accounting regime slipped to 197% at the end of June, from 211% at the end of 2018.
Analysts polled by the company had, on average, expected a ratio of 204%, slightly above the company’s 150-200% target range.
“In a turbulent first half of 2019, market movements had a negative impact on the capital position in the Netherlands,” Chief Executive Alex Wynaendts said in statement.
The Dutch division’s solvency is currently below the target range, Aegon said, which meant it had not distributed cash to the holding company in the first half of the year.
Aegon reported a 5% drop in underlying pretax profit for the period, to 1.01 billion euros ($1.13 billion), which was slightly better than expected.
Its 26% increase in net income to 618 million euros, however, widely missed expectations as insurance provisions in the Netherlands rose because of adverse credit spread movements.
Aegon this week said that Wynaendts would leave the company next year and would be succeeded by the CEO of Dutch rival NN Group, Lard Friese.
(Reporting by Bart Meijer; Editing by David Goodman)