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The Actuary The magazine of the Institute & Faculty of Actuaries

Aegon taps Dutch state lifeboat for €3bn

Aegon, the Dutch insurer, has accepted a €3bn capital injection from the state, becoming one of the largest Benelux financial companies to accept government cash, after its shares lost more than three-quarters of their value in the past year.

“Even healthy people put an extra jumper on if it gets cold,” said Wouter Bos, the Dutch finance minister. “We’ve given that extra jumper to Aegon.”

However, in spite of an initial rally, Aegon’s shares then fell again heavily, touching a new 16-year low at one point. Investors appeared concerned that although the deal did not dilute current shareholders’ interests, it would reduce earnings. The capital injection came just over a week after ING, the Dutch banking and insurance group, accepted a €10bn government investment.

In a statement, the company said: “Aegon believes that, given today’s market levels and the ongoing uncertainty regarding the financial and economic environment, it is prudent at this time to reinforce its capital buffer to a level substantially in excess of its AA rating requirements”. Aegon has also announced that it is forgoing its final dividend for 2008