Aegon ScotEq redress costs hit £171m
Aegon has revealed it has been hit by an additional £71m in costs associated with its Scottish Equitable redress programme, taking total redress costs to £171m.
In its latest quarterly results announced this morning, Aegon says it incurred further redress costs of £52m in the three months to the end of December with operating costs associated with making the redress payments of £19m.
The latest figures are on top of the £100m redress costs announced in November.
In December 2010, ScotEq’s UK life and pension business was fined £2.8m by the FSA and ordered to pay customers £60m following significant administrative failings.
Aegon’s results also reveal that its distribution arms, Positive Solutions and Origen, posted a combined loss of £2m for Q4 last year, following a loss of £1m for the previous quarter.
Over the year Pos Sol and Origen reported a £6m loss, compared to a £5m loss in 2010.
Total operating expenses for Aegon’s UK business were £98m, including the £19m costs associated with the ScotEq redress programme. Operating expenses also include charges of £42m related to Aegon’s restructuring programme, and £10m following the launch of Aegon’s white-labelled platform, powered by Novia. Aegon plans to launch a corporate platform, also backed by Novia, in June this year.
Aegon UK has posted a loss in pre-tax earnings for Q4 of £22m, compared to an £8m loss in Q3. For 2011 the company has posted a £5m pre-tax earnings profit, against a £61m profit in 2010.
Aegon has also announced that its UK chief executive Adrian Grace has been appointed to the company’s management board, subject to approval by the Dutch Central Bank. Grace was appointed chief executive in March 2011, previously having worked as chief operating officer since February 2010.
On the results Grace says: “Aegon UK successfully tackled some major historical issues in 2011 and this has had a negative financial impact in the short-term.
“Our 25 per cent cost saving target has been met and our customer redress programme is drawing to a close. Our platform proposition has been warmly received in the market. We are fully focused on the future and ensuring we take maximum advantage of the opportunities that lie ahead with the retail distribution review and pensions reform.
“Our development plans concentrate on our core markets of at retirement and workplace savings and we are on track to achieve our immediate and long-term goals.”