Aegon’s distribution arms Origen and Positive Solutions have posted a combined loss of £2m for 2012, but cost savings have seen Aegon’s UK earnings jump to £85m.
Origen and PosSol made a combined loss of £6m in 2011 and £5m in 2010.
Underlying pre-tax earnings for the Aegon UK business are up a massive 1600 per cent from £5m in 2011 to £85m in 2012, following the completion of Aegon’s programme to target cost reductions of 25 per cent, equating to £80m. In 2011, Aegon also had to pay out £100m in 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 to £17m, while pensions business grew from a £50m loss 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 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.”
Evolve Financial Planning director Jason Witcombe says: “I genuinely do not know what the future holds for Origen and PosSol, but there has to be a question mark over how long any business can sustain losses for.”