Dutch insurance company Aegon NV (AEG) announced Tuesday it will restructure operations in Britain and look into strategic options for Transamerica -- its U.S.-based life reinsurance arm. The company's priority, it says, is "to repay the remaining €2 billion [$2.5 billion] of capital Aegon received from the Dutch government at the height of the financial crisis in 2008." Aegon's total bailout at the time was
€3 billion euro.
The restructuring in the U.K. is expected to reduce costs by 25% by the end of 2011, coming mainly from lowered expenses in life insurance and pensions, and lead to a return on capital of "8 % to 10% by 2014." Aegon intends to refocus the business on the growth market segments of "At Retirement" and "Workplace Savings," where it holds leading positions, it stated.
The announcement said "Aegon intends to explore strategic options for its life reinsurance business, Transamerica Reinsurance, which include finding a suitable buyer for the business." Transamerica Reinsurance is the third-largest life reinsurer in the U.S., and seventh globally, according to the company. It wrote $1.93 billion in net premiums in 2008. Dealbook adds that at the end of last year the unit was valued at €1.6 billion ($2 billion).
Shares of Aegon rose some 3% in Amsterdam.