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ScotEq payout sees Aegon make Q4 loss

Aegon UK made a loss of £6m in the final quarter of last year as it had to pay consumer redress of £25m.

The compensation figure relates to Scottish Equitable, which was fined £2.8m by the FSA in December and ordered to pay customers £60m after administrative failings.

The list of failings included not issuing 238,000 policyholder documents, incorrectly calculating the guaranteed minimum pension payments and future benefits of customers, and failing to identify errors in calculating rebates to charges on 25,000 pension policies.

Full-year earnings for Aegon rose by 30 per cent to £61m but life and pension business fell by 15 per cent to £190m in the final quarter compared with the fourth quarter of 2009. Positive Solutions and Origen saw a combined loss of £2m in the fourth quarter and a loss of £5m over the year. In 2009, the distribution businesses made a loss of £8m in the fourth quarter and a loss £16m over the year.

Aegon UK chief executive Otto Thoresen says: “Earnings dropped due to a charge related to our customer redress programme, which seeks to address historic issues in our customer records. Complet- ing this programme is an essential part of creating a strong platform to build on for the future and we are on track to repay the majority of consumer detriment by the end of 2011.”

Aegon is aiming to cut operating costs by 25 per cent, or £80m, by the end of this year. It says cost savings of £33m had been achieved by the end of last year.

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