AEGONNV now expects to incur a second-quarter post-tax book loss of £481million in connection with the divestment of its £9 billion annuity portfolioin the U.K.
The Dutch insurer had earlier estimated a second-quarter hitof £245 million on the divestments, through separate transactions, to Rothesay Life Plc and Legal & General Group Plc. It said the revision is aresult of adjusting the IFRS book loss on the transactions.
It also noted that it expects to partly offset the lossthrough the release of expense reserves on the portfolio of £70 million and torealize gains on assets to be disposed of that are related to the annuityportfolio. These unrecognized gains amounted to £50 million post-tax as of May31.
The transactions remain on track to be completed during thefirst half of 2017 and will lead to a total capital release of £500 million.AEGON noted that each of the two transactions contributed roughly 15 percentagepoints to its Solvency II ratio at Dec. 31, 2015, and March 31, 2016, but that theeffect as of June 30, 2016, will be roughly 20 basis points combined.