Aegon’s distribution arms Origen and Positive Solutions have posted a combined loss of £2m for 2012, but cost savings have pushed Aegon’s UK earnings up to £85m.
Origen and PosSol made a combined loss of £6m in 2011 and lost £5m in 2010.
Underlying earnings for the UK business went from £5m in 2011 to £85m in 2012, following the completion of Aegon’s programme to target cost reductions of 25 per cent. In 2011 Aegon also had to cover the cost of customer redress after the FSA fined Scottish Equitable £2.8m in December 2010 over administrative failings.
Between October and December the UK business posted underlying earnings before tax of £20m, compared to a loss of £22m for the same period in 2011.
The life business saw earnings drop 43 per cent from £30m in Q4 2011 to £17m for Q4 2012, while pensions business grew from a loss of £50m in Q4 2011 to earnings of £3m. Origen and PosSol earnings amounted to nil over the last three months of 2012, compared to a loss of £2m for the same period the previous year.
Aegon says it expects to see a reduction in pension business during this 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 fourth quarter. This adverse effect is expected to continue into 2013.”
Aegon UK chief executive Adrian Grace says the following the launch of its platform, Aegon Retirement Choices and its One Retirement Sipp product, the business is well placed for 2013.
He says: “I believe our proposition is, and will prove to be, the leader in our chosen markets. “We have signed up to a broad range of distribution deals with numerous firms who we believe will have a bright future in the new regulated world. This is a great endorsement of our strategy. These firms have cited our proposition as the main reason for choosing Aegon and we look forward to bringing news on further distribution deals in the near future.”