Aegon to sell run-off businesses to Wilton Re

Aegon has agreed to sell its two largest US run-off businesses, the payout annuity business and the bank-owned/corporate- owned life insurance business to Wilton Re.

Under the terms of the deal, Aegon's Transamerica life subsidiaries will reinsure $14bn of liabilities to affiliates of Wilton Re US Holding. The transaction and related management actions are expected to result in a capital release of around $700m this year.

The Dutch insurer said the deal is consistent with its stated strategic objective to reduce the amount of capital allocated to its run-off businesses.

Chief executive officer Alex Wynaendts said: "This transaction is in line with our strategic objective of accelerating the release of capital allocated to these businesses and will further enhance the financial flexibility of the group. We are confident that this agreement is also in the best interests of our customers, as Wilton Re is a highly respected reinsurer in the market."

As a result of the transaction, the company’s group Solvency II ratio is expected to improve by approximately 6 percentage points in the second half of 2017.

Bryan Garnier said: "Very positive news for Aegon given the holding will receive circa €630m of cash in H2 which we think almost fully reduce the risk of an accelerated book building to solve the Dutch capital issue."

At 1247 BST, the shares were up 4.8% to €4.64.