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Dutch life insurance and pension company Aegon NV (AGN.AE), which generates the bulk of its earnings in mature markets in the U.S. and Europe, will reorganize its loss-making operations in Asia to benefit more from high growth prospects in the region.
At an investor conference in New York, Aegon said late Tuesday its businesses in Asia will be combined in headquarters in Hong Kong, making the operations better placed to grow organically.
Douglas Henck, who previously held several positions in Asia at American International Group Inc (AIG) and Sun Life Financial Inc (SLF), has been named chief executive of the new unit, the company said.
Aegon, which is restructuring its U.K. operations and last week said it would cut 5% of its workforce in the U.S., said the new plans for Asia underscore its strategy to achieve a "greater geographical balance."
The revamp comes as many of Europe's insurers are looking to expand in Asia, where demand is growing at a fast pace as wealthier consumers are shifting savings from cash to insurance and investment products.
However, Aegon's operations in the region represent only a small fraction of its total business and have made losses in recent quarters, mainly because of higher costs related to investments in joint-ventures in China, India and Japan.
By 2012, Aegon aims to allocate 50% of its capital to operations outside the U.S., where it generates the bulk of its earnings through its Transamerica operation. The main portion will go to emerging markets in Central and Eastern Europe, Latin America and Asia.
Aegon shares closed at EUR4.47 Tuesday.
-By Maarten van Tartwijk, Dow Jones Newswires; +31 20 571 5201; firstname.lastname@example.org