S&P Lowers Aegon’s Hungarian Sub ‘pi’ Ratings to ‘A-‘

June 1, 2005

Standard & Poor’s Ratings Services announced that it has lowered its long-term public information-based (‘pi’) counterparty credit and insurer financial strength ratings on Hungary-based Aegon Magyarorszag Altalanos Biztosito Rt (Aegon Hungary) to ‘A-pi’ from ‘Api’.

“The rating action solely reflects the lowering of the long-term local currency sovereign credit rating on the Republic of Hungary to ‘A-‘ on May 27, 2005,” noted S&P credit analyst Jelena Bjelanovic.

“Based on stand-alone characteristics, the rating on Aegon Hungary reflects the company’s very strong, sustained earnings over time; strong overall liquidity; and strong capitalization,” said S&P. “There is no credit for implied group support from the parent, AEGON N.V. (A+/Stable/A-1).

“Aegon Hungary is the fourth-largest composite insurer in Hungary based on premium income, with premiums split between life (60 percent) and non-life (40 percent). The company has a significant competitive advantage in the life segment, where it is the second-largest insurer with a 16 percent market share in 2004.

“The non-life segment continued to grow in 2004, but the company remained fourth in this segment, in a market where the top three insurers received 67 percent of non-life premium income. The growth in premiums experienced in life and non-life business in 2004 reflects a buoyant mortgage and household market. The company’s cooperation with both Raiffeisen Bank and HVB are likely to have contributed to growth in this area.”

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