Aegon’s distribution arms Origen and Positive Solutions posted a combined loss of £2m for the first three months of the year, as the company saw a 60 per cent drop in UK earnings.
Origen and Positive Solutions made a £5m loss over 2010, and a loss of £16m over 2009.
Underlying earnings before tax for the UK business fell 60 per cent to £10m from £25m in Q1 2010.
The company’s UK results were pushed down by a £21m charge mainly to cover the cost of customer redress after the FSA fined Scottish Equitable £2.8m in December over administrative failings.
At the time time Scottish Equitable were ordered to pay customer compensation of £60m. In the final quarter of last year Aegon paid redress of £25m.
Aegon says: “Efforts to determine the full scope of customer redress is expected to continue throughout the remainder of the year and could potentially lead to additional charges.”
The company expects most of the compensation to be paid by the end of this year.
The life side of the UK business posted £21m in pre-tax earnings for Q1, up 17 per cent from £18m for the same period last year. Aegon says this is largely due to cost reductions.
The pensions UK business recorded a loss in earnings of £9m, compared to £9m earnings in Q1 2010.
Aegon UK is targeting cost reductions of 25 per cent by the end of this year. The company says the restructuring programme is on track, with £37m in cost savings already made out of the targeted £80-£85m cost savings for the year.
Overall Aegon posted underlying pre-tax earnings of £360m, down 7 per cent from £388m in Q1 last year.
Aegon chief executive Alex Wynaendts says: “We made solid progress on Aegon’s strategic objectives during the quarter. In the UK, we are confident that our new chief executive and management team will fully deliver on our plans.”