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Aegon distribution arm posts £2m loss as pensions earnings plummet


Aegon’s distribution arm which includes Origen and Positive Solutions has posted a combined pre-tax loss of £2m for the first quarter of 2013.

The distribution arm, which includes Aegon’s 22 per cent stake in Tenet and its 3.5 per cent stake in Lighthouse, made a £1m loss in the first quarter of 2012. It made a pre-tax £2m loss overall for 2012.

Pensions earnings fell 55 per cent to £5m in Q1 2013 from £11m in the same period in 2012. 

Aegon attributes the drop in pensions earnings to loss of business post-RDR and says the adverse effect will continue throughout the first half of the year.

It says: “The negative effect from adverse persistency, which the UK insurance industry is experiencing as a result of the implementation of the RDR, amounted to £7m in the first quarter. This adverse effect is expected to continue at least into the second quarter of 2013.”

Aegon’s life business increased earnings rose 13 per cent to £17m from £15m.

Net underlying earnings fell 55 per cent to £18m from £40m in Q1 2012.

New life sales rose 37 per cent to £244m from £178m in the same period in the previous year.

Aegon UK chief executive Adrian Grace says: “We will continue to adapt and evolve, investing in emerging technologies that will ensure productivity, sustainable growth and excellent customer outcomes.”


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There are 9 comments at the moment, we would love to hear your opinion too.

  1. Roman Duzinkewycz 8th May 2013 at 9:05 am

    That will mean more job losses then eh?

  2. Do I see more redundancies coming. Now Aegon is seeing the effects of a washed out RDR. Taking a leaf out of Lord Lawson’s bookon the EU then now is the time to ditch the RDR as things would be better

  3. Well that is one view. However I also note that Resolution has seen a significant sales drop as well. Could it be that the substandard are being weeded out? Could this be a result of the RDR? What of other (perhaps better) pension providers? Are they seeing drops? I see that M&G have posted record inflows. I just wonder if the RDR is now permitting quality to come through and squeezing the second rate.

  4. Simon Mansell 8th May 2013 at 10:54 am

    How any business operates under the yoke of the regulatory powers I just don’t know. But what I do know is that everything counts and you can’t keep making demands without consequences.

  5. Look at Aegon’s business plan and the way they are looking to move forward, I think we’ll see a number of redundancies made regardless of any losses. Give it another 12 months and you’ll see a different story in respect of them showing positive numbers.

  6. If I was a shareholder I would want to know how much has been invested in these businesses, and how much they have lost over the however many years it is since the first foray into the then IFA market.

    I would also want to know why the directors have failed to call time and demand the most dignified exit possible.

    I knew some of these businesses before they were bought and banged together in Origen. They were decent practices, making money.

    I don’t think a single life company has made a real success of an investment in IFA businesses. I suspect it is because running a life company is about as far away as you can get from running a personal professional services business.

  7. Each year Origen and Pos Sol announce another round of losses and each year there is a ‘valid’ justification for why they occurred and how things will improve. Without parental support these business’s would cease to exist, yet it is hard to see how maintaining that support justifies the ends.

  8. tyrone murphy 8th May 2013 at 4:13 pm

    Aegon went through a phase where they were buying pension business by offering higher rates of commission. The type of adviser attracted to these types of deal will simply wait until the clawback period has expired and then euphemistically re-broke the business

  9. Charles Thywtt 8th May 2013 at 4:35 pm

    Pos Sol made a healthy profit last year. I think in all these articles, Aegon seem to report on the two companies combined which seems a tad unfair.

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