Aegon to pull back in the UK
Share
Aegon is dramatically scaling back its UK business by cutting 25 per cent of costs by 2011 and refocusing on at-retirement and workplace saving products.
Following press reports claiming the Dutch insurer was offloading its UK arm for £1.5bn, Aegon revealed it had considered a full disposal but decided against it because in the current market this would be at a discount to its value.
The firm may exit non-core business areas, including protection, after a review, ending in September.
Aegon says job cuts will be inevitable as part of its costcutting efforts but would not disclose numbers.
Chief executive Alex Wyn-aendts refused to rule out a future withdrawal from the UK or selling distribution arms Positive Solutions and Origen.
He said Aegon will be “reviewing the suitability of these businesses” within the group.
The firm is pulling out of bulk annuities but will continue to invest in its Sipp in a bid to improve return on capital from 2.7 per cent in 2009 to between 8 and 10 per cent by 2014.
It is pushing ahead with its corporate wrap and insists it has no plans to stop paying commission on group pensions until the end of 2012.
Wynaendts said: “The UK market is difficult and we were not satisfied with the returns we were making and that is why we conducted a very thorough review of all the options.
“The first is a full disposal, the second one is a run-off of the business. The third one is restructuring the business while building on our strengths.
The best option for shareholders is to implement a restructuring. Today, a full disposal would be at a significant discount to its value.”
Richard Jacobs Pension & Trustee Services director Emily Jacobs says: “We have always had a good relationship with Aegon so it would be a real shame if this saw service levels drop.”
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
