Aegon to fully repay govt aid by June next yr

Dutch insurer Aegon today said it will repay the remaining euro 2 billion of the euro 3 billion aid it had received from the government by June next year, as part of its agreement with the European Commission.

Aegon originally received euro 3 billion from the Dutch government during the financial crisis in 2008 and has already handed over euro 1 billion last year.

The insurer expects to receive the final approval from the European Commission soon regarding the euro 3 billion of capital support the company obtained from the Dutch State in December 2008, it said in a statement.

As part of the process to conclude the Commission's review, Aegon has agreed with the Dutch Ministry of Finance to amend the terms and conditions of full repayment of remaining euro 2 billion.

Now, the total premium payable on the remaining euro 2 billion would be reduced to 40 per cent instead of the originally agreed 50 per cent.

"We are pleased to have concluded this process with the European Commission, which is expected to approve the capital support. As part of the agreement with European Commission, Aegon will complete full repayment of the remaining euro 2 billion by the end of June 2011 market conditions permitting and as a further step we will repay euro 500 million this month," Aegon CEO Alex Wynaendts said.

"Going forward, we will continue to pursue our actions to ensure continued financial strength, greater cost and operational efficiencies and an improved risk profile," Wynaendts added.

Aegon, a global provider of life insurance, pensions and long-term savings and investment products, has a presence in India through its joint venture with Religare.

As part of its approval of the insurer's aid package, the European Commission would impose restrictions on the firm's activities.

Aegon cannot not pursue acquisitions and pay dividend on common shares, until the company completes full repayment to the Dutch State.

Further, the insurer's ability to compete based on prices would also be limited, with the Commission restricting it from taking a top-three price leadership position in residential mortgage and Internet savings businesses in the Netherlands.