Aegon redress costs for ScotEq leap by £70m
Aegon has been hit with an additional £71m in costs associated with its Scottish Equitable redress programme, taking total costs to £171m.
Aegon’s latest results, published last week, show the company incurred redress costs of £52m in the three months to the end of December, plus 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, the FSA fined ScotEq’s UK life and pension business £2.8m and ordered it to pay customers £60m following significant administrative failings.
In 2011, Aegon UK’s profits fell by 92 per cent to £5m, down from £61m in 2010. The company posted a loss in the fourth quarter of £22m compared with an £8m loss in the third quarter.
Aegon’s distribution arms, Positive Solutions and Origen, posted a combined loss for 2011 of £6m compared with a £5m loss in 2010.
Aegon UK chief executive Adrian Grace has been appointed to the company’s management board, subject to approval by the Dutch Central Bank.
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. We are fully focused on the future and ensuring that we take maximum advantage of the opportunities that lie ahead with the RDR and pension reform.”
Yellowtail Financial Planning managing director Dennis Hall says: “The redress programme has been dragging on for a long time. Aegon is likely to want to draw a line under this although I am not sure it will be able to.”