Top executives leave Aegon as management split in two

AEGON UK, the Edinburgh-based life assurer, yesterday announced the shock departure of two of its senior executives in a shake-up of its management team.

Feilim Mackle, director of life and pensions, and Steve Clode, marketing director, were told on Wednesday they were no longer part of chief executive Otto Thoresen's plans, and left that evening.

The company considered it a coup when it hired Mackle from RBS and Clode from Nationwide Building Society in September 2007. Clode instigated Aegon UK's 30 million sponsorship of British Tennis.

Adrian Grace, currently director of sales, distribution and development, takes on a new role of chief operating officer of the Dutch-owned group's life and pensions business.

Mark Laidlaw, the group's former finance director and who was recently promoted to chief risk officer, will take up a position at the parent company in The Hague.

The departures follow that of another senior executive, HR director Sandy Begbie, who left in January to join rival Standard Life. He joined Aegon just a month before Mackle and Clode.

Thoresen insisted the changes were part of a "simplification" of the board. The group has split its operations into two distinct boards: one to oversee the group's life and pensions business, which will be headed by Grace, and another to oversee its distribution division, which lost 19m in 2009.

Thoresen says the group is recruiting a new head of the distribution division and he expects to make an announcement in the next few weeks.

The changes come ahead of sweeping regulatory changes affecting the way that intermediaries sell pension products due in 2012.

"I don't look at it as cutting my team in half. What I see is I now have two teams which are focused on the two parts of our business," Thoresen said.

"What we are recognising is that the best way to get good delivery and execution of strategy is to allow management to be far more focused on those different business activities."

The restructuring of the UK's management comes as the group reveals that its life and pensions business for the year fell 23 per cent to 943m.

The group also booked 183m in impairment charges for the year due to its "significant investments" in corporate bonds, particularly in financial services.

Alex Wynaendts, chief executive of Aegon NV, cited the group's 1.3 billion of impairments and an "uncertain environment" for cutting its payout to shareholders. This was despite reporting better-than-expected earnings and a return to profit in the fourth quarter.

Net profit was 393m, compared with a loss of 1.18bn in the same period a year ago.

During the quarter Aegon repaid 1bn in bailout money to the Dutch state, a third of the 3bn it received in the autumn of 2008. In the UK, underlying earnings for the year slipped 62 per cent, down from 113m to 43m in 2009.

In comparison, the US – a much larger part of the business – fell 28 per cent to $1.1bn while earnings in the Netherlands grew 5 per cent to 398m.

But Thoresen welcomed an "encouraging" fourth quarter, reporting an improvement in profitability and "more of a sense of stability".

UK life and pensions new business rose 9 per cent in the last quarter of 2009, while underlying earnings were 30m – a 131 per cent increase on the same quarter in 2008 when the firm made a loss of 11m.