Aegon posts muted operating profit, dragged by US and China

Dutch insurer Aegon AGN on Thursday reported a muted operating profit for 2024 as weakness in its key U.S. market and China weighed on earnings, sending its shares falling.

Aegon has been divesting assets in Europe, including the sale of its Dutch operations to rival ASR Nederland ASRNL in 2022, to sharpen its focus on the U.S. market.

The shares fell more than 8% to the bottom of Europe's benchmark STOXX index SXXP by 1013 GMT, with analysts pointing mainly to the disappointing earnings.

Aegon's annual operating profit, based on IFRS accounting, fell slightly to 1.49 billion euros ($1.55 billion), which J.P.Morgan analysts said was 9% below their estimate.

The U.S. business lagged due to "onerous contracts" in the key region, J.P.Morgan wrote in a note, adding this could be a long-term hazard for Aegon.

KBC Securities also flagged weaker Americas and international markets, notably China, in a note to clients.

However, while a potential rekindling of stagflation in the U.S. has raised some concerns, Aegon's executives remained positive on the backdrop President Donald Trump is expected to provide.

"The overall expectation from the Trump administration is that it will support continued strong economic growth in the U.S.," CEO Lard Friese told Reuters.

China is meanwhile a "weaker spot" in Aegon's strategy, Friese added.

Asked about Aegon's around 30% stake in ASR, received as part of the deal to sell its Dutch operations, CFO Duncan Russel said the group was not planning to sell it anytime soon.

Gains from the ASR stake helped Aegon cushion an earnings impact from restructuring charges in the second half of 2024, it said in the statement.

Aegon reiterated that it expected its operating capital generation to be around 1.20 billion euros this year.

It also sees a free cash flow of around 800 million euros in 2025, and Friese said he was looking to bring cash flow back to around 1 billion euros by the end of next year.

($1 = 0.9587 euros)