Due in major part to negative variations in U.S. claims, worse results in the UK non-insurance sector, and losses on overseas contracts, the company's IFRS operating profit for the first half of 24 months fell 6% short of JP Morgan's projections and was below consensus predictions.

According to Morgan Stanley's estimations, this led to a net loss of €65 million as opposed to an expected profit of €609 million.

Although the headline OCG numbers were impressive, Morgan Stanley and UBS pointed out that the underlying performance was not as good. The effect of €403 million in other charges, mostly from mortality assumption changes, and €312 million in negative fair value items were specifically emphasised by UBS.

But Aegon announced an OCG of €588 million for the 2024 second quarter, beating Morgan Stanley's and JP Morgan's projections by 7% and 12%, respectively. Positive reserve releases and investment income, totalling over €40 million in one-time benefits, contributed to this outcome.

Aegon has maintained its full-year OCG projection of €1.1 billion despite this, with JP Morgan pointing out that the business may even exceed this goal.

As noted by both JP Morgan and UBS, Aegon's capital position remained strong, with the U.S. Risk-Based Capital (RBC) ratio at 446%, exceeding forecasts by 9 percentage points.

Morgan Stanley said that the market's cautious position was partly due to the discrepancy between headline results and underlying performance, which included new business pressure and fair value losses.

Large charges and a difficult market environment tainted the results, according to UBS, despite the fact that other measures were positive. They said that the absence of a sizable positive trigger in the near future further soured investor mood, which resulted in a drop in price targets and a subdued response from the market.

Aegon restated its forecast for OCG for the entire year at €1.1 billion, with a rise to €1.2 billion anticipated in 2025. Additionally, the business kept its goal of generating over €700 million in free cash flow in 2024 and €800 million in 2025.

(Sources: investing.com, reuters.com)