Aegon’s distribution arms Positive Solutions and Origen made a profit for the third quarter of 2010, compared to combined losses earlier this year and heavy losses in 2009.
In its third quarter results, published today, Aegon’s distribution arms made a £1m profit for Q3, compared to a £2m loss in Q2 and a £16m loss for 2009. The combined arms have made a £3m loss for 2010 so far.
Aegon says the profit is down to improved market conditions and cost cutting measures.
Aegon UK chief executive Otto Thoreson says the UK business is facing a period of “both challenge and opportunity”.
He adds: “As we refocus our business on workplace savings and at-retirement, areas where we already have positions of strength, we have to make some hard decisions in the short term to achieve what we want for the business in the long term. We are making good progress with our restructuring programme with some important steps implemented during the quarter. Our future business model will position us well to take advantage of the significant opportunities our two chosen markets present, and ensure long term success for AEGON in the UK.”
Aegon UK reported a drop in value of new business to £16m. The life and pensions firm, which is currently implementing a 25 per cent cost cutting drive in the UK, says the decrease resulted from a reduction in immediate annuity sales.
Aegon also announced operating costs had fallen to £102m, mainly as a result of cost savings and the transfer of asset management activities at the beginning of the year to Aegon Asset Management. However, the company warns that “further restructuring charges” are likely to arise in future quarters.
Overall, underlying pre-tax earnings increased to £24m, driven by a 3 per cent gain in new life sales to £219m compared with Q3 2009. Net income increased to £44m, partly as a result of a £25m gain following the Government’s decision to cut the corporation tax from 28 per cent to 27 per cent as of April, 2011.