90 jobs axed as Aegon UK slims down

Aegon, the Dutch-owned life and pensions company, announced yesterday it will close two more businesses in Britain, resulting in a further 90 job losses.

Its third-party pension administration and its employee benefits software businesses, both based in England, are not considered core to the company's plans.

The announcements came in an update on measures first announced in June aimed at taking 80 million a year in costs out of the UK business.

It will retain the closed book of business of Guardian Financial Services, which continues to provide a steady cash flow to the company.

The firm will also retain its life insurance and protection business which support the company's aim to focus on the at-retirement market in which the Scottish Equitable brand owner has a strong market position.

The company is streamlining its management and organisational structure which will be in place by the end of next year. There will be some changes to reporting lines and the loss of a number of senior management roles over the course of the year.

Aegon has already taken a number of measures to restructure its UK operations, including the closure of its group risk business, its withdrawal from the bulk annuities market and the reorganisation of the company's UK sales division which led to 106 job losses.

It wants to focus on life insurance, pensions and asset management in order to improve earnings growth, cash flow generation and return on capital.

The third-party pensions administration business is part of Aegon's trustee solutions business unit, and currently employs 82 staff in Daresbury, Cheshire. It will be wound down while the remainder of the business, which provides support for clients moving from defined benefit to defined contribution schemes, based in Edinburgh, will be retained.

The employee benefit software business, Aegon Benefit Solutions, currently employs seven staff in London. The business will also move into wind-down.

Edinburgh will lose seven senior management roles, but the big job losses in the city - likely to be as many as 600 - have yet to be confirmed and the company is expected to give a further update in November when it presents third-quarter figures.

Otto Thoresen, chief executive of Aegon UK, said the group had withdrawn from the third-party pensions administration business as it could not achieve desired volumes.

"The decisions we have announced today follow a thorough review of our businesses and how they fit with our new strategy announced in June," he said.

"Our new approach will see Aegon concentrate on the at-retirement and workplace savings markets, which are already positions of strength for us in the UK. There is now greater clarity around the company.It is good that the advisory sector is clear about what Aegon plans to do."

Alex Wynaendts, the group chief executive, reiterated the company's commitment to the UK and said the restructuring was "essential to our larger objective of improving returns and sharpening our focus on the long-term prospects for our business".

He said: "By reducing costs, improving service levels and focusing on those market segments where we have leading positions, I am confident that we will create a more efficient organisation.

"The UK continues to be a key market for Aegon and we are committed to pursuing the future opportunities from a position of strength."