Dutch insurer Aegon NV (AEG) Thursday announced a share issue of EUR1 billion Thursday to partially repay state aid even as it swung to a second-quarter loss.

The company wants to use the proceeds to repay EUR1 billion from a total EUR3 billion state capital injection it received in October 2008.

The company said it had EUR3.5 billion in excess capital at the end of the second quarter and that it wants to identify additional cost savings.

"We are well on track to achieve our cost savings target for 2009. At the same time, we are working to identify additional cost saving measures. We remain convinced that our strategic objectives to strengthen AEGON's capital position, reduce costs and implement actions to safeguard customer trust are the right ones in the current environment and for the long term", Chairman and Chief Executive Alex Wynaendts said

The company slid to a second-quarter net loss of EUR161 million, down from a net profit of EUR276 million a year earlier after taking a EUR385 million loss on the sale of a unit in Taiwan.

The underlying pretax profit before tax, which excludes book losses and other extraordinary items, fell to EUR404 million from EUR596 million a year earlier.

In the quarter the value of new business came at EUR181M, Aegon said.

Aegon provides life insurance, pensions and other long-term savings and investment. The company has major operations in the Netherlands, the U.S. and the U.K.

With just over EUR330 billion in revenue-generating investments at the end of 2008, Aegon serves more than 40 million policyholders in over twenty countries.

Aegon's shares closed Wednesday at EUR5.72. In the year to date, the shares have gained 26.3%.

- By Bart Koster; Dow Jones Newswires; +31 20 571 5201; bart.koster@dowjones.com