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

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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 also includes Aegon’s 22 per cent stake in Tenet and its 3.5 per cent stake in Lighthouse, made a £1m pre-tax 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, down 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 13 per cent to £17m from £15m.

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

New life sales rose 37 per cent to £244m, up from £178m in the same period 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.”

PMI Independent Financial Advisers director John Stewart says: “I think the distribution figures probably reflect how difficult a start to the year we have seen across all businesses. However, if those losses continue in the second quarter I am sure Aegon will be concerned.”

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