Aegon UK pre-tax earnings fell by 60 per cent from £25m in the first quarter of 2010 to £10m for the first three months of this year, as distribution arms Origen and Positive Solutions reported continued losses.
The results were forced down by a £21m charge, mainly to cover the cost of customer redress after the FSA fined Scottish Equitable £2.8m in December for administrative failings.
Scottish Equitable was ord-ered to pay £60m in total in compensation, of which £25m was paid by Aegon in the final quarter of last year. Aegon says most of the compensation will be paid by the end of this year.
The company’s life business posted £21m in pre-tax earnings for Q1, up by 17 per cent from £18m for the same period last year. Aegon says this is largely due to cost reductions.
The pensions UK business recorded a loss in earnings of £9m compared with £9m earnings in Q1, 2010.
Origen and Positive Solutions saw a combined loss of £2m for Q1, which follows a £5m loss over 2010 and £16m over 2009.
Technology & Technical managing director Kim North says: “Aegon’s purchases of Origen and Positive Solutions still seem a good fit strategically, even though the financial services market has been hard over the last few years.
“From next year I expect these businesses to move into profit as long as Aegon remains committed to the UK market.”