Aegon NV's share price was down in morning trading after the company reported lower operating capital generation and solvency levels than analysts were expecting.

The share price was down 6.32% to €5.01 at 11:28 a.m. European time.

The company's operating capital generation of €243 million for the quarter and year-end group Solvency II ratio of 211% fell short of analysts' median estimates of €307 million and 216%, respectively.

UBS analysts said in a research note that they were expecting a negative share price reaction as a result of the lower-than-estimated operating capital generation and Solvency II ratios.

The analysts also said the company's projected 2022 and 2023 operating capital generation of €1.2 billion and €1.3 billion appears to be below consensus expectations of €1.5 billion to €1.6 billion.

The share price drop comes despite higher-than-expected profits and more bullish indications about dividend growth. Aegon made a profit of €526 million for the fourth quarter of 2021, beating median analyst consensus estimates of €423 million.

CEO Lard Friese told analysts that Aegon now expects "more linear" growth of its dividend toward its 2023 target, after previously predicting "muted" near-term expansion.

Since the company made its prediction at its December 2020 capital markets day, it has "made steady progress on [its] strategic priorities and financial targets," Friese told analysts on a call for Aegon's fourth-quarter earnings.

Aegon has proposed a final 2021 dividend of nine euro cents per share, which would take the total for 2021 to 17 cents per share, five cents above the 2020 level. The company is targeting a 2023 dividend of approximately 25 cents per share.

Aegon's wide-ranging overhaul includes cutting costs of €400 million and reducing gross financial leverage to between €5 billion and €5.5 billion by 2023. The company saved €244 million of costs in 2021, compared with a target of €200 million, and hit its €200 million leverage reduction target for the year.

The insurer generated free cash flow of €729 million in 2021, versus a target of €350 million to €400 million, and has increased its free cash flow target for 2022 by €100 million to €550 million to €600 million.