AEGON UK interim results 2005
- Half year operating earnings increase by 40% to £67m
- Half year life and pensions sales decrease by 4% to £321m
- Quarter two life and pensions sales increase by 22% compared with quarter one
- Asset management sales show strong increase
Profits
AEGON UK’s operating earnings for the first half of 2005 under IFRS were £67m, an increase of 40% compared with the same period in 2004. Operating Earnings for quarter two 2005 were £33m, an increase of 22% compared with quarter two 2004. This sustained growth in profits reflects continuing strong equity markets and AEGON UK’s ongoing focus on operating efficiency.
New business
Based on the standard industry measure of new annual premiums plus one-tenth of new single premiums (API), total new business for the quarter for AEGON UK life assurance operations rose 13% to £177m compared with 2004 and by 22% compared with the first quarter of 2005.
Asset management new business, mainly reflected in the “Off balance sheet” figures rose £610m compared with 2004. This reflects a strong demand for fixed income capability from the institutional and retail market.
Aggregate growth for AEGON UK in the first half year increased by 14% to £388m compared with the same period in 2004.
Overview
Commenting on the results, AEGON UK CEO Otto Thoresen says,
"AEGON UK has delivered another quarter of outstanding earnings, reflecting our determination to maintain and develop a profitable business mix within efficient operating parameters. New business volumes across the group have shown impressive growth this quarter. In the corporate market we have seen growth in our group risk business and increased demand for our expertise in fixed income management from institutional investors.
This is a critical period in determining the future role of the UK long term savings industry with the Turner report expected in the autumn. AEGON UK believes that the key next step in addressing the savings gap lies in achieving greater consumer engagement in the need to take responsibility for their long-term financial well being. I believe that financial advice will play an increasingly important role in this process.
The trend towards longer life expectancy will have a significant impact on individuals, families and companies. Earning patterns and lifestyles may change, requiring evolving protection and long term savings solutions to meet individuals’ needs.
Companies have a crucial role to play and the measures they put in place on behalf of their workforce will be very significant. I believe that the workplace will be an increasingly important forum for financial education and saving.
It is vital that our industry responds to the major implications of this. I intend to ensure that AEGON UK puts the emerging needs of individuals and companies at the centre of our thinking. “
New Premium Prodiuction First Half 2005
1 January - 30 June 2005 v 1 January – 30 June 2004
AEGON UK New premium production (API is AP+1/10 SP)
| 2005 £m | 2004 £m | % +/- | |
|---|---|---|---|
| Annual premiums | 1367 | 1368 | (0) |
| Single premiums | 184 | 196 | (6) |
| API | 321 | 333 | (4) |
AEGON UK off balance sheet production (SP)
| 2005 £m | 2004 £m | % +/- | |
|---|---|---|---|
| Total | 669 | 59 | 1033 |
AEGON UK aggregate production
| 2005 £m | 2004 £m | % +/- | |
|---|---|---|---|
| Total | 388 | 339 | 14% |
-Ends-
Notes to editors
- Earnings of £ 67 m 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.
- June saw the beginning of AEGON UK’s strategic distribution partnership with Openwork, the distribution business developed by Zurich Financial Services. AEGON believes that this link has the potential to significantly increase its individual pensions business by mid 2006. AEGON UK also has distribution agreements with St James’s Place, Thinc Destini, Lighthouse Group, Principality Building Society and Burns Anderson.
- In May 2005, AEGON UK’s IFA Origen was appointed to provide independent financial advice to the policyholders of Resolution Life. This partnership began in June 2005.
- AEGON Asset Management UK has won several major institutional mandates including a £300m mandate from Nottingham County Council
- AEGON UK has assets under administration of £42 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