* Q2 underlying earnings 514 mln eur vs poll 505 mln
* Aegon to make accounting model changes in Q3
* Shares down 3 percent
(Adds company and analyst comment, shares)
Aug 14 Dutch insurer Aegon NV said it
would make changes to its accounting models and expected to set
aside more money to take account of U.S. mortality rates, which
analysts said could hit third-quarter earnings.
The firm made the announcement after it reported a
forecast-beating 7 percent rise in underlying earnings before
tax to 514 million euros ($686.8 million) in the second quarter,
above a 505-million-euro average expectation in a Reuters poll
The company said second-quarter results were boosted by
investment gains but negatively affected by accounting model
changes at its Dutch and U.S. businesses.
"Aegon will implement further model updates in the third
quarter of 2014," it said, adding it expected to make more
conservative assumptions about mortality rates in the United
States in a review of that business in the period.
Aegon's shares fell as much as 4.5 percent and were down 3
percent by 1040 GMT, lagging a 0.3 percent drop in the STOXX
Europe 600 insurance index.
"The group warns that third-quarter numbers will be impacted
by 'model updates' and a revision of its U.S. mortality
assumptions," KBC analyst Matthias De Wit said in a note to
Societe Generale analyst Nick Holmes said the announced
interim dividend of 11 cents per share had also rankled.
"The market seems to have focused on Aegon's flat dividend
as disappointing," Holmes said in a research note, adding that
the insurer's management had made clear the interim dividend
should not be seen as a leading indicator.
Aegon Chief Executive Alex Wynaendts told a conference call:
"We want to have a dividend that is sustainably growing."
Wynaendts also said he did not expect further fallout after
Britain's Financial Conduct Authority imposed an 8.3 million
pound ($13.8 million) fine on Aegon unit Stonebridge
International Insurance for failing to treat up to half a
million customers across Europe fairly over sales of accident
"We are making sure that in no other place in our business -
and we are reviewing it very thoroughly - there is anything
similar," he said.
"The fine ... should close this whole file and we are not
expecting anything further from here," he added.
Aegon is expanding its joint-venture with Spain's Banco
Santander to include Portugal but said it may take some
time to roll out its offer of insurance products to the lender's
2 million customers there.
"It's a very under-penetrated customer base," Wynaendts
Aegon also said gross deposits rose 3 percent to 13 billion
euros in the second quarter, while the return on equity rose to
($1 = 0.7484 euros; $1 = 0.5996 British pounds)
(Reporting by Jonathan Gould in Frankfurt and Roshni Menon in
Bangalore; Editing by Thomas Atkins and Pravin Char)