Aegon surges on share buyback, cost-cutting plans

Shares in Aegon surged after the Dutch insurance group announced a €400m (£299m) share buyback and lifted its 2015 dividend.

The company is looking to improve its operational performance, targeting a group return on equity of 10% by 2018.

It will reduce annual operating expenses by €200m by the end of 2018 and make additional investments in digital capabilities and expertise of €50m per year above the current level to support the organic growth of the business.

Chief executive officer Alex Wynaendts said: “I am pleased that we have a strong Solvency II capital ratio of 160%, which is in the upper-end of our target range of 140-170%. This allows us to launch a €400 million share buyback program today and announce a 9% increase in the dividend for the full year of 2015.”

Aegon lifted its final dividend per share to €0.13, bring the total dividend per share for 2015 to €0.25.

The company also announced plans to restructure US operations from a business lines orientation into one, functionally-organised business to get closer to customers.

It also intends to implement the outcome of the strategic review of Aegon's businesses in the UK; explore options for the annuity book, and continue the growth of the successful platform.

At 1007 GMT, Aegon shares were up 11.7% to €5.53.