Aegon bucks trend with rise in new sales

LEADING insurer Aegon UK, which employs more than 2600 people at its Edinburgh Park headquarters, has seen its new business sales rise despite the tough market conditions.

The UK arm of Dutch firm Aegon said first half new life and pensions sales increased by four per cent to £430 million after it targeted the less volatile corporate pensions market.

Despite the growth in new business, overall underlying pre-tax earnings dipped by 22 per cent in the six months to the end of June, to £92.6m.

Aegon UK chief executive Otto Thoresen said: "This year has brought challenges for the long-term savings sector but Aegon UK is weathering the storm well.

"We have seen robust growth in life and pensions new business, driven partly by growth in corporate pensions. Our focus on corporate customers as well as retail customers means our business is more resilient to market volatility.

"On the retail side, we saw further good growth in our individual annuities business where we have underlined our position as one of the key players in this market."

The company also said it has benefited from its continued focus on its range of guaranteed products in the at-retirement market.

Mr Thoresen said that the company is continually trying to innovate in order to meet the needs of the "baby boomer" generation reaching retirement.

The overall value of new business, seen as a key measure of profitability, rose by 16 per cent to £91m, due to a mix of new business and improving margins.

The fall in underlying earnings was partially blamed on stockmarket levels, a key driver of earnings, being seven per cent lower than the first half of 2007.

In the individual life and pensions business, the firm saw strong new business growth in individual annuities, up 17 per cent to £70m compared to 2007 and underlining its rapid progress in this area over the last three years.

Individual protection new business rose 16 per cent to £26m compared with 2007, reflecting greater market penetration and ongoing focus on business protection.

"Aegon UK has brought new thinking to capital management with our recent securitisation which released capital for use by Aegon in line with its global strategy," said Mr Thoresen. "We are in a strong position to move forward in the UK long-term savings market in the months ahead."

Aegon's global performance was hit by impairments on US credit and sub-prime mortgage investments.

The Dutch firm said net profit dropped by 58 per cent to £218m.

But chief executive Alex Wynaendts said: "In this environment, Aegon's businesses performed well with solid underlying earnings and growth in both sales and deposits."