Insurer Aegon quarterly earnings drop less than expected

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The head office of Dutch financial insurance company Aegon is seen in The Hague, October 28, 2008. REUTERS/Stringer (NETHERLANDS)

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AMSTERDAM, Feb 9 (Reuters) - Aegon NV , the Dutch insurer with significant operations in the United States, reported on Wednesday a smaller-than-expected decline in fourth-quarter earnings, with operating profit down 2% at 470 million euros ($537 million).

The company said higher fees and a strong performance by equity markets helped outweigh a poor U.S. claims experience.

Analysts in a company-compiled poll had forecast the operating profit to come in at 458 million euros, compared with 479 million euros in the 2020 period.

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Since taking the top job in May 2020, Chief Executive Officer Lard Friese has sought to end years of underperformance at Aegon by cutting costs, hedging risks and selling off businesses that are small or have volatile returns.

"The measures that we have taken to improve our operational performance and reduce our risk profile, together with support from favourable markets, resulted in free cash flow coming in well ahead of our earlier guidance."

In the fourth quarter, Aegon moved closer to completing the 830 million euro sale of its central and Eastern European business to Vienna Insurance Group (VIGR.VI).

It also struck a deal with Reinsurance Group of America (RGA) to hedge longevity risks in its Dutch pension operations - a move it said would reduce profit but improve Aegon's solvency ratio. read more

Friese reiterated that the company expects to generate around 1.2 billion euros in operating capital in 2022, and raised the insurer's estimate for free cash flow generation to 550 million-600 million euros, an increase of 100 million euros.

Shares of Aegon climbed 47% last year and 22% so far in 2022, closing Tuesday at 5.35 euros.

($1=0.8755 euros)

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Reporting by Toby Sterling; Editing by Clarence Fernandez and Sherry Jacob-Phillips

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