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Aegon results hit by ScotEq redress payout

Aegon UK’s earnings halved in the second quarter of this year to £9m from £18m in the same period in 2010 as the firm’s distribution businesses recorded combined losses of £1m.

The company says this is primarily due to exceptional costs of £18m linked to the ongoing redress programme for Scottish Equitable customers.

In December, the ScotEq’s UK life and pension business was fined £2.8m by the FSA and ordered to repay customers £60m following “significant” administrative failings.

Aegon UK says it has also spent £7m developing new product propositions.

The UK distribution businesses, Positive Solutions and Origen, posted combined losses of £1m compared with a £2m loss in the second quarter of 2010. This follows total distribution losses of £5m in 2010 and £16m in 2009.

Aegon UK chief executive Adrian Grace says: “This quarter’s results reflect the impact of the changes we are making in UK businesses as we reposition for the future. We know that some of the issues we are tackling mean an adverse financial impact in the short term but we also know they are changes that are essential in order to ensure our business is successful.

“Earnings this quarter also reflect the investment we have made in developing our plans to offer a new platform proposition for our chosen markets of at-retirement and workplace savings markets alongside our existing product range. We expect to begin a phased rollout of the platform later this year.”

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