AEGON UK first quarter results 2005
- Earnings increase by 62% to £34m
- New life assurance business falls 18% to £144m
- Asset management new business shows strong recovery
- Advisory deal with Resolution Life breaks new ground
Profits
AEGON UK’s operating earnings under IFRS rose by 62% to £34m, an increase of £13m on quarter one 2004, reflecting higher equity markets and the benefit of continued focus on expense management. Q1 2004 was also impacted by restructuring costs of £5m.
New business
Based on the standard industry measure of new annual premiums plus one-tenth of new single premiums (API), total new business for AEGON UK life assurance operations fell 18% to £144m. This reflects certain pricing and other changes made throughout 2004 in our core pensions markets.
Overview
"AEGON UK has achieved another quarter of outstanding earnings. This is a reflection of actions taken over the recent past to reduce operating expenses and improve profitability.
AEGON UK was one of the first companies to implement these actions and we have gone further earlier than many of our peers. The fall in new life and pensions volumes reflects some of these actions.
Asset management new business has enjoyed encouraging growth, on both the retail and institutional sides, as a result of continuing excellence from our fixed income team.Our retail fixed income offering is now recognised as one of the most attractive in the market. Consistently strong fixed income product has translated into some important wins emerging on the institutional side.
This week’s announcement that Resolution Life has chosen Origen to provide independent financial advice to its policyholders breaks new ground.
It highlights Origen as a leading and financially strong IFA and underlines AEGON UK’s distinctive position as an important provider of financial advice as well as long term savings products.
It is clear that the UK needs a strong long term savings industry. Pensions are now a central issue in UK economic affairs. It is important that we achieve a situation where consumers are confident in the ability of the industry to meet their future needs. Advice will be central to delivering this and I believe AEGON UK is well positioned to take strategic advantage of future developments."
New Premium Prodiuction Quarter 1 2005
January – 31 March 2005 v 1 January – 31 March 2004
AEGON UK New premium production (API is AP + 1/0 SP)
| 2005 (£m) | 2004 (£m) | % +/- | |
|---|---|---|---|
| Annual premiums | 82 | 103 | (20) |
| Single premiums | 624 | 724 | (14) |
| API | 144 | 175 | (18) |
AEGON UK off balance sheet production (SP)
| 2005 (£m) | 2004 (£m) | % +/- | |
|---|---|---|---|
| Total | 80 | 26 | 208 |
Embedded value
AEGON nv has today published its embedded value figures under the new European Embedded Value regulations. AEGON UK’s embedded value figure is £2.1bn.
The gross value of new business has risen 68% to £84 m, equating to a gross margin on new business of 13.3%.
Total assets at AEGON UK currently stand at £39.4bn.
-Ends-
Notes to editors
- Operating earnings of £34m under IFRS refers to income before corporation tax excluding net gains and losses on investment and impairment charges. AEGON UK’s constituent business units include Scottish Equitable, AEGON Asset Management UK, and AEGON UK Distribution Holdings.
- On Monday 9th May, it was announced that AEGON UK’s IFA Origen was appointed to provide independent financial advice to the policyholders of Resolution Life.
- In December 2004, AEGON UK announced a strategic distribution partnership with Zurich Financial Services. AEGON, currently 3 rd in the individual pensions market, believes that this move will potentially enable it to significantly increase its individual pensions business by mid 2006. AEGON UK has also announced distribution agreements with St James’s Place and Thinc Destini.
- AEGON UK has assets under administration of £39.4 billion and employs around 4,000 staff in the UK. AEGON UK is part of the AEGON Group, which is one of the world's largest listed insurers and has assets under management of £200 billion.
Lesley McPherson