the Netherlands-based insurer, reported a loss for the second quarter, reflecting primarily a one-time loss related to the sale of Taiwanese life insurance business as well as impairment charges.
Key highlights for AEGON UK include:
- Value of New Business (VNB), a key measure of profitability, was £39.3m in Q2 taking the total for the first half to £91m, in line with first half of 2008.
- Underlying IFRS earnings for the UK business for quarter 2 were lower than the same period in 2008 by 54% at £17m, and for the first half by 67% at £24m.
- Sales of new life and pensions business were £512m (API) in the first half, down 19% compared with the same period in 2008. This includes sales of variable annuities of £24m (API).
- In Q2, sales of new life and pensions business was £238m (API), down 30% on Q2 2008, which was a record quarter for AEGON UK, boosted by a large pension scheme and a short term distribution deal that boosted investment bond sales during the period. This includes sales of variable annuities of £15m (API).
- AEGON maintained its market share in the UK life and pensions market, currently 10.4%.
- Withdrawal from the group risk market in June, freeing up £47m of capital over the next 3 years, in line with strategy to reallocate capital to more profitable areas of the businesses.
- Five-year sponsorship of British Tennis began, part of AEGON’s strategy to invest in its brand development in the UK market.
Commenting on the UK results, AEGON UK chief executive Otto Thoresen said
“This is a resilient performance, achieved in some of the most challenging market conditions we have ever experienced. Despite a fall in sales amounts, which was to be expected given the lower stock market levels, value of new business, a key profitability measure, is in line with the first half of 2008, itself a very strong reporting period.
“The recession has meant that some people have put ther retirement savings plans on hold, and lower market levels mean pension pots are lower, but we must look for ways to help people take the right financial decisions and act on them once the storm passes.
“Guarantees will become increasingly important to people. This year AEGON has continued to lead the way in guaranteed retirement income solutions with our variable annuity product development, launching our Secure Lifetime Income product, which is marketed alongside our traditional annuity offering. We are also looking at how we might develop our SIPP proposition, where we are already a strong player in the market.
“Our investment in building our brand through our sponsorship with British tennis is allowing us to reach new audiences, with over 7 million people watching televised coverage of the AEGON Championships during June.
“AEGON remains one of the leading life and pensions players in the UK market and we intend to stay at the forefront through these challenging times.”
