The insurer will pay a dividend of 2.65 euros per share for the 2019 financial year, despite the recommendations of the regulators.
Last February, before the pandemic took its current magnitude, the insurance group had stopped the amount of its dividend on the occasion of the publication of its annual results.
“In view of the confirmed strength of its balance sheet and the persistence of a strong Solvency position, Ageas once again confirms its intention to distribute a gross cash dividend of 2.65 euros per share during the financial year 2019”
In March, despite the recommendation of EIOPA, the European supervisor of the insurance sector, Ageas had maintained the payment while making an adjustment. A payment of a first dividend of 0.27 euros had thus been approved by the general meeting on 20 May.
Dividend, but no share buybacks
Barely a week later the new request from the National Bank, the parent company of AG Insurance reiterated its desire to spoil its shareholders. “In view of the confirmed strength of its balance sheet and the persistence of a strong Solvency position, Ageas once again confirms its intention to distribute a gross cash dividend of 2.65 euros per share during the financial year 2019” , indicates the company. It will be up to the general meeting on October 22 to decide on this payment.
“We understand the position of regulators”, comments Bart De Smet, CEO of Ageas. “But we have carefully researched our position over the past few months internally and conducted several stress tests to see how we can weather this crisis. We have sufficient liquidity and our solvency position remains strong. This gives us enough leverage. confidence to deliver on our dividend promise. “
In this sense, Ageas follows the example of other large companies in the sector such as Axa or Allianz.
Ageas indicates, however, that, taking into account the recommendations of the same National Bank, it suspends the launch of its new program share buybacks, which amounted to 150 million euros.
Good resilience of non-life
Regarding the actual results, Ageas achieved a net result of 339 million euros in the second quarter, exceeding analysts’ forecasts who bet on a net profit of 225.5 million euros.
The insurer explains these figures by “the excellent result in non-life which more than compensates for the lower result in life “.
For the half-year as a whole, the group’s income stood at 791 million euros, including the capital gain of 332 million euros generated by transactions on Fresh titles, convertible bonds issued at the time of Fortis.
Group inflows, in life and non-life, fell 5% over the first half to fall to 20 billion euros, despite a resumption of premium payments in Asia in the second quarter. Its solvency II ratio stands at 192%, including the negative impact of the offer on Fresh shares.
“Technically, the first semester of this year is better than last year,” says Bart De Smet. “We have the advantage of having a geographic diversification and in our businesses.” Thus, inflows increased in China over the whole of the semester, whereas their volume had fallen by 15% in the first quarter.
The equity of the group rose to 11.4 billion euros. Ageas indicates that the payment of the interim dividend will weigh a half a billion euros on its equity.
The Covid-19 crisis has not hit Ageas as hard as other companies in the sector. “Event cancellation and trip cancellation products are hardly present in our portfolio,” says Bart De Smet.
Despite the gloomy economic context, the company believes it can achieve its initial financial goals, namely an underlying result of between 850 and 900 million euros over the full year.
Departure of the president
The group has also announced the departure of its president, Jozef De Mey who has held the position since 2009. If his term runs until May 2021, the man has applied to retire as early as October 22, 2020, at the end of the shareholders’ meeting.
Bart De Smet, CEO, recalls that “under the chairmanship of Jozef, Ageas has become a confident and profitable insurance company which has managed to turn the page on the Fortis heritage while developing its presence in Europe and strengthening its presence in Asia through fruitful partnerships “.
Ageas announces that the succession is already planned and that the proposed candidate will be presented later.