Aegon is reviewing the future of its guaranteed drawdown offering after its parent group has decided to sell the Irish business that reinsures it.
In its second quarter results today, Aegon reported the sale of Aegon Ireland to AGER Bermuda Holding.
Speaking to Money Marketing, UK chief executive Adrian Grace says the firm’s Secure Retirement Income product, which offers on-platform guaranteed drawdown, was back by Aegon Ireland.
The product will stay open until at least the end of the year, but Aegon is reviewing its future thereafter.
At November last year, Secure Retirement Income sales so far that year were up 139 per cent on the same period in 2015.
Last November, Aegon withdrew its off-platform income guarantees range and closed four products – Secure Lifetime Income, Secure Income, Secure Capital, and Secure Trustee Investment – to new business.
Grace says: “We will work with the new owners of the Irish business on what the potential solutions are. We have always said there is a market in a pension freedoms world for customers looking for certainty and guarantees. At the same time, customers and advisers need to use those products. At this moment in time, we are doing quite a lot of business but is it a viable product?”
Grace says an announcement about the future of the guaranteed product will be made by the end of the year.
He adds: “For now it is no change, the product remains open, we continue to write new business and if there is any change in product strategy then we will let you know in due time for any closing of the product if we decide to do that.”
If Aegon leaves the guaranteed drawdown market, it will follow the likes of MetLife, who decided to pull their offering earlier this year.
Aegon will also make an announcement about its institutional platform in the next two weeks after confirming in June it was holding discussions about a new technology provider for the business.
Aegon inherited the institutional business through its acquisition of Cofunds. Technology firm FNZ is understood to be one of the providers involved in the discussions.
Grace says: “The wholesale institutional business is something we are very committed to as a business model. But we want to make sure users get the right technology to support that. We are talking to a couple of people who might be able to provide that core technology.”