Aegon NV entered into a long-term longevity reinsurance agreement with Canada Life Reinsurance Ltd. covering risks associated with €12 billion of liabilities in the Netherlands.
The contract will commence Dec. 31 and will run until the portfolio runs off.
About 200,000 in-payment and deferred pensioners will be reinsured by Canada Life Reinsurance under the agreement, which will not affect the services and guarantees Aegon provides policyholders.
Under the agreement, Aegon's pretax underlying earnings will decrease by about €25 million per year. Its Solvency II ratio in the Netherlands will increase by 10 to 12 percentage points, corresponding to a 5- to 6-point increase in its group Solvency II ratio.