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Aegon new life business down 26% for year to date

Aegon has announced new life sales across the group dropped 26 per cent in the nine months to September 30, to £1.35bn from £1.84bn. 

The firm has freed up £815m in capital and on November 30 is set to repay the £905m borrowed from the Dutch Government last year by repurchase of 250 million convertible core capital securities. Aegon says its cost saving target of £135m has been achieved.

The value of new business fell 9 per cent to £498m from £546m in the year to date. New life sales in the third quarter were down 26 per cent from £557m to £434m compared with the same period in 2008 but were up on the second quarter’s figures.

In the UK, life and pensions new business for the first nine months dropped 24 per cent to £706m compared with the same period in 2008. Asset management new business flows in the third quarter were £491m, boosted by two large mandate wins of £227m and £160m.

Group CEO Alex Wynaendts says: “Aegon’s improved capital position, the strength of our franchise and return to profit in the third quarter are evidence that the actions we initiated a year ago were the right ones at the right time. On November 30 we will repay the Dutch Government, an important first step toward full repayment of the capital support Aegon received last year.

“We are pleased that our strong capital position has enabled us to take this step while continuing to maintain a larger capital buffer, a necessary precaution in the current environment. We are also encouraged by the improved sales and net deposits for the quarter and the continued confidence of our customers. Moreover, we have achieved our full-year cost savings target and further reduced Aegon’s risk to financial markets.

“Aegon today is in a strong position and we remain committed to further executing our strategy to position our businesses for long-term growth and profitability.”

Aegon UK chief executive Otto Thoresen says: “This is a sound underlying third quarter performance given the continuing challenging economic conditions affecting new business flows across the UK life sector.

“I am particularly pleased that the progress we have achieved in our asset management business in recent years has resulted in some important new business wins and recognition of our improved strength in this market, with funds under management reaching our highest level to date.

“With the actions we are taking, Aegon UK will benefit significantly from a sustained recovery in the UK economy as people re-focus on their retirement needs.

“Pensions and retirement issues will feature heavily in the political agenda as we approach the general election and this presents an important opportunity for the long term savings industry to help people better understand the need to make the right financial plans for their future.

“Together with our brand strategy our plans will ensure Aegon continues to develop its position as one of the UK’s leading life and pensions companies.” 

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