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No A-Day boom, says Aegon chief

Aegon does not expect A-Day to increase the volume of pension business significantly next year, saying it believes growth in the market will be broadly similar to this year.

The firm says its life and pension sales were flat year on year over the first three quarters of this year but this masks strong business growth in the second and third quarters after a weak start to the year.

Over the nine months to the end of September, life and pension sales weighed in at 491m, just down from 493m on an APE basis over the same period last year.

Within this, third-quarter sales were up 6 per cent on the third quarter 2004 and second-quarter sales were up by 7 per cent year on year.

Chief executive Otto Thoresen says that the first-quarter weakness was due largely to a lag in Axa’s pension repricing coming through and the firm focus- ing on management change internally.

He believes that if the current momentum continues into the fourth quarter, the full-year numbers will improve markedly but he does not expect A-Day to spark a massive rush in the market despite widespread speculation about a boom in business.

Elsewhere within the firm, group risk business leapt by 49 per cent and individual protection business was up by 28 per cent over the first nine months of this year compared with the same period last year. Aegon’s interim results include a 23m charge for an accelerated incentive plan for IFA Positive Solutions and the firm says a further 19m is due to be paid in two separate tranches over the next two quarters.

Thoresen says: “There has been an awful lot of talk about the impact of A-Day on pension sales but I believe that the underlying market will actually continue to perform as it is now.”

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