AEGON UK today announces record business performance for the first half of 2007, with significant growth in value of new business, earnings, and new life and pensions business. Over the first six months of the year, the group has also forged new distribution partnerships that will provide a framework to deliver profitable growth in the future.

Increased profits

AEGON UK’s value of new business figure, which reflects the value attributed to new business volumes and is a key measure of profitability, rose by 48% to £77.9m over the first six months of the year, compared with the same period in 2006. This indicates an improvement in new business margins over the period. Operating earnings increased by 23% to £92.6m.

Strong new business growth

Based on the standard industry measure of new annual premiums plus one-tenth of new single premiums (API), new business for AEGON UK’s life and pensions businesses reached £606m, an increase of 21% over 2006. Within this, AEGON has achieved a more profitable mix of business, with new business coming from non-pensions products rising by 34% and a move from regular premium businesses towards more single premium business.

AEGON’s Individual business saw strong new business increases across all areas, in particular in individual pensions, which rose by 39% to £206m API, compared with the same period in 2006. Individual annuities has seen strong new business volumes rising 49% to £60m API. Having entered this market in 2006, AEGON is already a top three player in new business terms. Onshore bonds also saw good growth and new business rose by 49% to £30m API.

AEGON’s distribution partnership with Barclays, announced in May, brings its market leading business protection proposition and new 5 for Life retirement income solution to a new and broader customer base. AEGON’s partnership with Openwork, the Zurich-owned adviser network goes from strength to strength and has been extended to include 5 for Life and offshore bonds in addition to pensions.

In the corporate pensions market, while the A-day impact that led to businesses reviewing their pension schemes has subsided, AEGON saw growth as more people joined and others increased their contributions to existing schemes.

AEGON’s entry to the bulk annuity market has made good progress, with increasing success in our target market of small to medium size businesses. AEGON’s partnership with UBS Asset Management, announced in May, enables it to tap in to a different market segment – that of larger corporates.

AEGON Asset Management’s retail funds business continues to flourish with new business volumes up 39% to £311m. The outstanding success of AEGON’s fixed income team continues to be the key driver here, but AEGON is also seeing improved performance in equities. In particular, the Ethical Equity fund has attracted increased new business in the first half. AEGON was delighted to announce the appointment last month of a new specialist property management team, which will enable it to manage property funds in house in the future.

AEGON’s advisory businesses, Origen and Positive Solutions continue to progress and demonstrate the opportunities that exist for well capitalised, scale advisory businesses.

AEGON UK’s chief executive Otto Thoresen says,

“AEGON has delivered an outstanding first half and a record second quarter. We are seeing increased profitability and sustained new business growth across all areas of the group.

“At the same time, with new distribution partnerships to reach new customers, in particular with Barclays and with UBS, we’ve put in place the framework which will allow us to achieve sustained organic growth in the future.

“AEGON’s life and pensions strategy is increasingly focused on propositions that reduce risk for our corporate and individual customers. As part of that, I am pleased with the growth we’ve seen in our annuities proposition. In individual annuities we have reached a top three market position from a standing start eighteen months ago. In the bulk annuity business, our credentials as a financially strong global insurer, with expertise in UK pensions are proving attractive in the market. We are looking forward to seeing future growth in this market.

“AEGON Asset Management’s retail funds business is going from strength to strength and we are building on our renowned success in fixed income with new developments such as recruiting a new property team, and in our ethical equity fund performance.

“AEGON’s continued strong business performance and range of customer propositions means we are now recognised as a key player within the UK long term savings market and I am looking forward to achieving further success in the months ahead.”

-Ends-

Notes to Editors

AEGON UK
First six months 2007 results
1 January – 30 June 2007 v 1 January – 30 June 2006

AEGON UK financial performance

Note: VNB post tax and cost of solvency

AEGON UK New premium production (API is AP+1/10 SP)

AEGON Asset Management off balance sheet production (SP)

Notes to editors

• AEGON announced a distribution partnership with Barclays in May 2007 incorporating its 5 for Life product and it market leading business protection proposition.
• On 4 May, AEGON and Openwork announced an extension of their partnership so that AEGON’s 5 for Life retirement planning product is now available via Openwork’s 2,500 advisers
• AEGON entered the bulk annuities market in November 2006, targeting the SME market. In May it announced a marketing joint venture with UBS targeting larger corporate clients.
• AEGON UK has distribution agreements for life and pensions products with Barclays, UBS, Intrinsic, Openwork, St James’s Place, Thinc Destini, Lighthouse Group, Principality Building Society, Burns Anderson, Clarkson Hill, Tenet, Park Row and Dunfermline Building Society.
• AEGON UK has assets under administration of £49.8 billion and employs around 4,000 staff. AEGON UK is part of the AEGON Group, which is one of the world’s largest listed insurers and has assets under management of £245 billion.

For further information

Lesley McPherson
Head of Media
T. 0131 549 3782 | M. 07740 897986
lesley.mcpherson@aegon.co.uk