NU Online News Service, May 6, 2003, 11:09 a.m. EDT – AEGON N.V., The Hague, Netherlands, is reporting $421 million in net income for the first quarter on $8.4 billion in revenue, compared with $540 million in net income on $7.5 billion in revenue for the first quarter of 2002.

Low stock prices, low interest rates and bond defaults all hurt earnings, and the weak dollar hurt earnings stated in euros, AEGON says.

But Don Shepard, AEGON’s chief executive, says the credit markets seemed to improve, despite continuing problems with defaults.

Net income at the U.S. operations fell to $245 million for the latest quarter, from $358 million for the first quarter of 2002. Bond defaults and narrow spreads on fixed-income investments hurt the U.S. results, but sales of traditional universal life insurance were strong, AEGON says.

Sales of variable annuities were strong because of “consumer demand to capture the guaranteed minimum income benefit before its discontinuance in January 2003,” AEGON says.

AEGON reports its earnings both in dollars and in euros. When the company made the currency conversions that appear in its latest earnings release, it used an exchange rate of $1=0.93 euros for the 2003 results, and an exchange rate of $1=1.14 euros for the 2002 results.