By Laura Lenkiewicz
(Reuters) -Dutch insurer Aegon's Solvency II ratio at the end of June missed analyst expectations, with the group also swinging to a 199 million euro ($216.5 million) net loss, it said on Thursday.
The company attributed the declines to unfavourable market movements in the UK and in the Netherlands, as well as investments and assumption updates in the U.S.
The solvency ratio fell to 202% from 210% at the end of March and short of the 208% expected by analyst in a poll compiled by the company. The net loss, meanwhile, compared with a net profit of 46 million euros a year earlier.
The group generated 492 million euros of operating capital in the first half, beating analyst expectations of 436 million euros. Operating capital generation grew as much as 42% in the Americas, reflecting the growth of U.S. subsidiary Transamerica.
Aegon has been simplifying its corporate structure in recent months by divesting Central and Eastern European businesses while focusing on its U.S. operations.
"What we are aiming to achieve over time through sustainable and robust growth in the U.S. is to improve our free cash flows while we reduce our exposure to lower-quality legacy books", Aegon CEO Lard Friese told reporters.
The priority is to focus on organic growth and execution of the company's plans rather than acquisitions, he added.
Aegon's shares were down 4% at 0819 GMT.
During a call with company executives, analysts were concerned with a 30% decrease in the company's end-June contractual service margin (CSM), which represents its unearned profit from future contracts.
CSM fell to 8.30 billion euros from 11.88 billion euros a year earlier.
Aegon's CFO Matt Rider said that the CSM figure will improve though that will take time.
"What you're going to see is that CSM is going to be released because so much of it is associated with financial assets, but it will take a long time", he said.
($1 = 0.9191 euros)