Aegon quarter two earnings miss forecast; solvency ratio narrows

AMSTERDAM (Reuters) - Dutch insurer Aegon (AEGN.AS) reported underlying earnings for the second quarter that missed analysts' expectations and showed its solvency ratio dipping slightly.

Aegon, the life insurer that owns the Transamerica brand, said underlying earnings before tax were 549 million euros ($611.4 million), up 7 percent from 514 million euros in the same period a year ago but below the 568 million euros forecast by analysts polled by Reuters.

Chief Executive Alex Wynaendts described the underlying results as "solid", with growth in variable annuities, pensions and asset management offsetting lower earnings from fixed annuities and divestments.

The company said its solvency under the current IGD rules that measure the financial strength of insurance companies declined to 206 percent from 216 percent at the end of the first quarter, "mainly driven by negative market impacts."

Shares in smaller Dutch rival Delta Lloyd NV (DLL.AS) have fallen more than 20 percent over the past two days because of worries about the company's position under the new Solvency II rules that come into force in Europe in January.

Aegon's shares have declined around 6 percent in the same period.

The Solvency II rules are designed to ensure that insurers have sufficient resources to cover their liabilities.

Aegon said it expected its Solvency II ratio to be between 140 and 170 percent. Delta Lloyd said it was tracking below 140 percent, although the precise models Dutch regulators will use to measure Solvency II at both companies are still under negotiation.

Aegon said it is confident about its solvency.

"Our strong capital position and growing cash flows enable us to raise the interim dividend," Wynaendts said. The dividend was increased to 12 euro cents per share from 11 cents in 2014.

(Reporting by Toby Sterling; Editing by Biju Dwarakanath and Keith Weir)