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Aegon sees benefit from demographic change

NETHERLANDS – Insurance and pensions provider Aegon says that the ageing population continues to “bode well” for its earnings for a long time to come.

“Demographic developments in our markets continue to bode well for Aegon,” the Netherlands-based company said in its 2002 annual report. “We expect the growth in pensions, savings and life insurance to exceed nominal GDP growth for many years to come, while the ‘pension gap’, or shortfall between present savings and future needs, has only been intensified by the economic downturn.

“Though partly masked by market turmoil, we believe the underlying dynamism of our business remains.”

Aegon said its taking a 20% interest in La Mondiale’s non-mutual activities signalled its commitment to the European private pension sector, which it said is “set for rapid growth”.

In the UK, the new Stakeholder pension and other regulatory developments were creating new business opportunities but putting pressure on margins.

Aegon recently acquired TKP, the pension administration agency created by the Dutch posts and telecoms pension funds. As at the end of 2002, TKP had around 150,000 participants.

Separately, Aegon Asset Management’s Dutch arm has disclosed that it won 28 mandates worth a total of 1.26 billion euros in 2002 – though the value of its assets under management declined 5.5%. It pointed to the 280 million euro balanced mandate from Pensioen Stichting Transport.

Aegon Asset Management The Netherlands’ assets under management fell to 41.7 billion euros from 44.1 billion euros. “The decrease was primarily affected by market devaluation,” the division said said.

Frans van der Horst, head of institutional sales in the Netherlands, said institutional investors were attracted to Aegon’s style, which he described as “enhanced active”.

Aegon said fixed income performance was “somewhat higher” than the relevant benchmarks, though equity fund performance was lower.

Aegon The Netherlands as a whole recorded net income for 2002 that fell to 523 million euros from 696 million euros in 2001, with revenues flat at 6.0 billion euros.

It added that the Pensioen en Advies unit which provides group pension plans “performed well” with sales outperforming 2001. The potential for growth in the division “remains positive”.

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