New Aegon chief drops brand plan

After years of struggling to establish the Dutch company's identity in Britain, following its acquisition of Scottish Equitable in 1994, Grace said he would prefer to build the company behind other brands.

He said he had worked at big companies where they had been able to grow without a major brand or where brand building had cost millions with only limited impact.

"We have the tennis (a 25 million tie-up with the Lawn Tennis Association] which helps us, but to build a UK brand will cost 30m to 35m a year," he said.

That was the sort of money poured into building an insurance brand when he was at Barclays.

"It had some impact but it was not dramatic," he said. He would prefer to build Aegon "behind other brands" in the way that one of his other former employers, GE Capital, operated.

"It is not our intention to build a big UK brand," he said. "I see us sitting behind other people's brands."

Grace, 47, who took over from long-serving Otto Thoresen on Friday, is expected to brief staff tomorrow at the Edinburgh headquarters where he will acknowledge the pain caused by the restructuring. Aegon is shedding 600 jobs in Scotland to take 80m out of costs and Grace will admit that the cost-cutting programme is not yet over.

But he will outline how he intends to rebuild the company around a twin approach to selling products, one using the traditional distribution model and another using a platform channel launched last week.

The technology enables advisers and clients to view a portfolio of products and policies simultaneously.

He will unveil his new top team, including a chief operating officer to take on his former role and two staff who are being promoted to key roles. Speaking as he prepared for his first day, he said: "It has been a tough time, cost cutting, names in the papers, low morale.

"We are not through the cost cutting so there will be more to come, but my hope is that we are through it by the beginning of next year. We are now looking at a growth strategy."

However, he said that would not mean "chasing market share for its own sake", and he ruled out acquisitions.

He described the new platform proposition, in partnership with Novia Financial, as a "huge step forward", and rejected criticism from those who claim Aegon is a latecomer to the idea, with 25 companies already providing a platform. Grace said Aegon has learned from others' mistakes and will offer a different approach based on cost control, differentiation, good technology and entrepreneurial thinking.

"No one has made any money on a platform business. We have watched the market and being a late mover has given us some advantages. A lot of people have made mistakes and spent a lot of money on technology that doesn't work," he said.

Most platforms are based on what he called "wealth accumulation" whereas Aegon will approach the savings and retirement market.