AEGON, the giant European insurance group, is in weekend talks with the Dutch government about the possibility of joining a €20 billion (£16 billion) state recapitalisation scheme.

The group, which employs more than 3,000 people in the UK through its Scottish Equitable division, has been heavily hit by credit-market losses and has warned of a further €275m of writedowns in the third quarter.

Although the company is not thought to be in danger of breaching solvency rules, Aegon is said to be examining whether to use the Dutch scheme to boost its solvency ratios.

The scheme was designed last weekend to facilitate a cash injection into ING, the banking and insurance group.

The Aegon talks come amid further signs of financial bailout schemes being extended to insurers. Two of America’s biggest insurance companies are in talks with the US Treasury about a possible state-cash injection.

MetLife and Prudential Financial are meeting Treasury secretary Hank Paulson this weekend in a move that may result in them tapping funds from the $700 billion (£440 billion) bailout designed to save the banking system.

A third insurer, the New York Life Insurance Co, is also believed to be involved in the discussions.

Fears are mounting that rapidly falling stock markets, coupled with losses from the collapse of institutions such as Lehman Brothers and Washington Mutual, could put insurers around the world under pressure. If insurers hit financial difficulties it could spark a new wave of selling in the markets. The US Treasury is said to be particularly concerned about the ability of the insurance sector to buy bonds.

Several Nordic governments are expected to reveal bank bailout plans this week.

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