Dutch insurer Aegon raises capital generation target on US strength

By Gaelle Sheehan and Victor Goury-Laffont

(Reuters) -Dutch insurer Aegon raised its annual capital generation forecast on Thursday after topping third-quarter expectations on the same metric, driven by strong performance in its key U.S. market.

Aegon has been simplifying its corporate structure by selling Central and Eastern European businesses while focusing on U.S. operations.

It expects operating capital generation to be about 1.2 billion euros ($1.3 billion) this year. It had previously expected to reach the 1.2 billion euro threshold in 2025.

However, the group maintained its 2025 targets and CEO Lard Friese told Reuters that "the strain on capital will be a bit higher" going forward.

The company's share price rose by 3.7% to about 5 euros by 0852 GMT.

KBC analyst Thomas Couvreur pointed to "continued solid sales momentum and strong underlying results" in a note to investors.

Aegon generated 310 million euros in operating capital in the third quarter after holding funding and operating expenses, up 29% from a year earlier and well above the 212 million euros expected by analysts.

Aegon's Americas region, which mostly consists of the U.S. business, represented two thirds of operating capital generation in the quarter.

The picture was "a bit more mixed" in Britain, which generated about 15% of group operating capital, Friese said. The region's total net deposit outflows widened by 6% to 1.92 billion pounds ($2.38 billion) in the quarter.

This was because of a loss of one large client in its pension business, Friese said, adding that underlying growth was "still quite buoyant".

($1 = 0.9228 euros)

($1 = 0.8078 pounds)

(Reporting by Gaelle Sheehan and Victor Goury-Laffont in GdanskEditing by Milla Nissi, Christopher Cushing and David Goodman)