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Aegon stays strong with buoyant Sipp

Aegon is continuing to see strong pension business with a 56 per cent rise in sales in the first three quarters to £768m from £491m in the first three quarters of 2005 on an annual premium income basis.

Individual pension sales more than doubled by 106 per cent to API £246m from £119m. These figures include a 177 per cent increase in Sipp new business to £137m.

Aegon UK chief executive Otto Thoresen says he expects A-Day changes to continue driving pensions up for the next six months on the individual side and for between 12 and 18 months on the group side.

He says margins are increasing and underlying earnings rose by 22 per cent to £127m from £104m last year.

Thoresen attributes the growth to the company’s diversification into new product areas, which has helped boost sales. Aegon launched its variable annuity product Five for Life in September and entered the bulk annuity market in October.

Individual protection sales rose by 38 per cent to £31m in the first nine months which Thoresen says is due to a focus on business protection and more complex sectors.

He says: “There is no doubt that most of the new business coming into the Sipp is switch business. Both ourselves and Standard Life are achieving significant momentum in the Sipp market.

“I expect the A-Day effect on the corporate side to continue for 12 to 18 months and beyond, with people restructuring their pension arrangements. On the individual side, in six months or so it will lose momentum but it is not a foregone conclusion that sales will drop off sharply.”

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