AEGON UK today announces increased new business volumes and profitability for the first nine months of 2007. Following another successful quarter AEGON is continuing to benefit from new distribution partnerships and product diversification strategy. The group is on track to deliver its stated objective of 10% market share and 20% value of new business margin by 2010.

Increased profits

AEGON’s value of new business figure which reflects the value attributed to new business volumes and is a key measure of profitability, rose by 41% to £118m, compared with the same period in 2006. This indicates an improvement in new business margin to 20.5% and a more profitable mix of business. Operating earnings increased by 21% to £138m.

New business growth continues

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 in the first nine months of 2007 reached £907m. This represents an increase of 18% on the same period in 2006 and a new record level for the group, although there was a slight slow-down in growth compared with the first half of 2007. AEGON continued to make progress in its aim to broaden the mix of life and pensions business, with developing businesses accounting for 30% of new business over the period.

AEGON’s Individual business saw pensions new business rise by 20% to £299m API and in addition, significant growth in a number of core areas, in particular individual annuities, which increased by 58% to £106.9m API, demonstrating AEGON’s strong position in this market. Individual protection new business rose 8% to £34.2m, based on increased market penetration. Offshore bonds rose 42% to £62.7m API. Distribution partnerships with Barclays and Openwork have continued to develop well.

In the Corporate business, while new business growth has been slower, up 8% to £330.7m API, growth has been achieved through new entrants and increased contributions to existing pension schemes. AEGON’s bulk annuity proposition is progressing to plan, with £71m of single premium business written to date in the small to medium size business sector. AEGON’s joint initiative with UBS, announced in May, has attracted significant interest.

AEGON Asset Management continues to flourish with retail fund sales up 35% compared with the same period in 2006, driven largely by fixed income sale. Improved equity fund performance has led to increased sales in some key areas, such as the Ethical Equity fund. AEGON is delighted to have recruited the market-leading Property investment team from Morley to bring the management of AEGON’s £2bn property fund in-house. The team are now in place, establishing in-house expertise for AEGON in this core investment area. In late October, AEGON announced the appointment of AAA-rated European fund manager Stuart Fraser, formerly at Standard Life, underlining its commitment to keep developing its equity performance capability.

AEGON UK chief executive Otto Thoresen says,

“AEGON has achieved a strong level of profitable new business growth which is ahead of most of our competitors in the sector.

“We’ve seen healthy new business levels in individual pensions. But we’ve also seen good growth in areas where I believe there is considerable development potential – where as an insurer our products create certainty for customers. AEGON is now an established key player in annuities and individual protection and we have led the way in the UK with the launch of our 5 for Life retirement solution. Our distribution partnerships with Barclays and Openwork are developing well and bringing AEGON propositions to a wider customer base. With the appointment of Feilim Mackle as managing director, I believe the Individual business will continue to make significant progress.

“Asset management continues to develop well and I’m delighted that the progress we have made means we are now able to attract some of the industry’s leading fund management talent to join Andrew Fleming’s team in taking the business forward.

“AEGON’s organic growth strategy, with a clear focus on meeting the changing needs of individual and corporate customers, diversifying our product mix and broadening distribution channels, continues to deliver success.  Our business model continues to deliver innovative solutions to customers, value to shareholders and gives us a platform for continued growth and delivery of our strategic goals. We are strongly positioned to achieve further growth as the UK long term savings market develops in the months and years ahead.”

AEGON UK
First nine months 2007 results
1 January – 30 September 2007 v 1 January – 30 September 2006

AEGON UK financial performance

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

AEGON Asset Management (SP)

Notes to Editors

• In September 2007 AEGON appointed Feilim Mackle, previously at RBS and Standard Life, as managing director of its Individual business, and Steve Clode, previously at Nationwide as Director of Marketing and Customer Strategy.
• AEGON Asset Management appointed AAA-rated Stuart Fraser in October 2007, and announced the appointment of the market-leading property team from Morley in August 2007.
• AEGON’s distribution partnership with Barclays was announced in May 2007 and brings its 5 for Life retirement solution and its market leading business protection proposition to Barclays customers.
• AEGON entered the bulk annuity market in November 2006 targeting the SME market and in May 2007 announced a partnership with UBS, targeting schemes upwards of £300m.
• AEGON 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 £52.3 billion and employs around 4,500 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 897 541
lesley.mcpherson@aegon.co.uk