Aegon UK celebrates 'record performance'

Published on Thursday 6 March 2008 09:32

AEGON UK, whose Scottish Equitable unit at Edinburgh Park employs around 2000 staff, said today that its operating profit over the past year had risen by 20 per cent to £185 million.

In what was described as "another record year of business performance", the group's chief executive Otto Thoresen also hailed a 27 per cent increase in the value of new business to 157m and its best-ever new life and pensions sales performance.

"Aegon has delivered another excellent year's performance reaching new levels of profitability and record levels of new life and pensions business", said Mr Thoresen.

The group's life and pensions new business rose by 12 per cent to 1.18 billion, helped by a successful strategy to diversify its product range and the channels it sells them through.

Overall, product diversification and other "development areas" was responsible for 30 per cent of new business last year.

The performance of Aegon UK was revealed as Dutch parent group Aegon, one of the world's leading insurance businesses, posted a four per cent dip in annual operating profit to 1.57bn, hurt by currency valuations and investment writedowns.

Group-wide new business was also up by 20 per cent to 712m, putting it on course to hit its target of 960m by 2010.

Commenting on Aegon UK's performance, Mr Thoresen said: "During the year, Aegon built important new distribution partnerships to enable it to reach new customers, and achieved significant progress in its product diversification strategy, building on its core pensions market with growth in annuities and protection and in the asset management business."

Aegon said its value of new business figure was helped by an improvement in margin from 19.1 per cent to 21 per cent.

Growth within its new business was driven by an 18 per cent increase in individual business, including growth of ten per cent in individual pension sales to 381m, although the final quarter saw a dip. New sales of individual protection policies were up 15 per cent to 47.1m, while individual annuities climbed 41 per cent to 136m.

In terms of corporate business, new business growth was just two per cent with Aegon citing "increased contribution levels and new entrants to existing group personal pension schemes" as a limiting factor. However, it said that its corporate business was "well positioned" going forward.

At its funds business, Aegon Asset Management (AAM), there was "significant growth" in new business, including a 30 per cent increase in retail funds to 566m.

Mr Thoresen – who has just handed his recommendations to the Government for a national "Money Guidance" advice service – said he was "particularly pleased" with the performance of AAM, under the direction of Andrew Fleming, despite the recent market volatility.