Ratings agency and actuarial firm AKG has downgraded Aegon’s financial strength rating from a B+ to a B and raised questions over the group’s commitment to the UK market.
The move means Aegon’s financial strength is now rated as ‘strong’ rather than ‘very strong’, resulting in a number of networks and nationals reviewing Aegon’s place on their panels.
Aegon says AKG’s report contains inaccuracies but declines to say what these are.
The AKG rating takes into account a number of factors including capital, liquidity, with-profit balance sheet positions, structure and size of funds, typical fund performance and image and strategy.
The report says: “In strategic terms the accent now appears to have shifted away from the life company operation and unless success in other areas is established there will be some uncertainty as to whether a shrinking UK presence delivers on the parental requirement.”
An Aegon spokesman says: “We consider this report to be inaccurate and we do not believe the interpretation given on publicly available data truly reflects the position of Aegon UK. We have been speaking to AKG since August and have pointed out some of these inaccuracies.”
Aegon also notes that it is rated A- by Standard and Poors, A3 by Moodys and A by Fitch.
Threesixty Services, Lighthouse and Chase de Vere all say Aegon’s position on panels will be reviewed while On-Line Partnership Group is communicating the report to members. Threesixty’s minimum panel requirement is a B+.
Managing director Phil Young says: “We are reviewing but as our panel requires B+ or higher for almost all products the outcome is likely to be determined by the downgrade.”
Lighthouse chief executive Malcolm Streatfield says: “A downgrade in financial strength is never welcome and we will review this as part of our normal regular review process. Lighthouse will be taking AKG’s views seriously.”
Chase de Vere head of communications Patrick Connolly says: “Financial strength is a primary consideration for any provider on our panels and we are currently in discussions over the downgrading of Aegon by AKG.”