August 10, 2017 / 6:14 AM / 10 months ago

UPDATE 1-Dutch insurer Aegon lifts profit, capital position

AMSTERDAM, Aug 10 (Reuters) - Dutch insurer Aegon on Thursday beat market forecasts with a 23 percent increase in underlying pretax profit and said it had boosted its capital buffer.

The company posted a 23 percent rise in underlying pretax profit to 535 million euros ($627.9 million) on the back of higher fee income and improved claims, it said in a statement.

Analysts polled by Reuters had predicted a core profit of 505 million euros on average.

The company ended the first half of 2017 with a solvency ratio of 185 percent under Europe’s new Solvency II rules, up from 157 percent at the end of the first quarter.

An agreement with regulators on the methodology for calculating the ratio at its business in the United States, where it does roughly two-thirds of its business, contributed a 15 percentage point increase in the group ratio.

On a comparable basis, it said in a statement, the group solvency ratio rose 13 percentage points, mainly due to divestments and capital generation.

Aegon said it was increasing its group Solvency II ratio target range to 150-200 percent, up from 140-170 percent, to take into account the new U.S. methodology which was okayed by Dutch regulators.

Chief Financial Officer Matthew Rider said in an interview that with the capital issues at the Dutch business “off the table”, Aegon could return to focusing on its long-term strategy.

In the Netherlands, another core market for the company, the solvency ratio increased to 175 percent from 144 percent on a proforma basis due to a 1-billion-euro capital injection from the group, the sale of Dutch financial advisory group UMG and risk profile enhancements, it said.

$1 = 0.8520 euros Reporting by Anthony Deutsch; Editing by Amrutha Gayathri and Sherry Jacob-Phillips

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