Aegon hit with new client business drop of 19% in 2011
Firm says slump caused by refocus of internal strategy, advisers writing less business
Advisers reducing the amount of business they write while restructuring ahead of the RDR has contributed to reduced life and pensions sales at Aegon, the company has said.
Figures from Money Management’s upcoming new business trends survey show Aegon suffered the greatest percentage drop in total new life and pensions business in 2011 among those providers surveyed, at 19.3%. This was excluding the Co-operative, which last year closed its life business.
“Aegon has been focusing on delivering profitable propositions within our core markets of at-retirement and workplace savings,” a spokesperson said, adding that Aegon has therefore consciously pulled back from some markets, such as annuities, reducing business volumes.
The company wrote £725.68m in new life and pensions business in 2011, based on annual premiums plus 10% of single premiums, compared to £903.36m in 2010.
Aegon’s spokesperson added financial advisers – who are the sole distribution outlet for Aegon life and pensions business and have historically done so, according to our survey – have priorities elsewhere at present.
“Market conditions in the run-up to RDR are challenging, with many advisers focused on redefining their business model in preference to writing more business,” he said.
Larry Bignell, chartered financial planner at Grimsby-based Hanson Wealth Management, uses Aegon products and argued it may be a case of competitiveness rather than advisers not servicing clients.
“The majority of people are preparing for the RDR but the products have still got to be there and be competitive,” he said. “We have all had to restructure to an extent but you still need products, you can’t just restructure and not offer any products.”
Aegon said that the job losses and restructuring had no impact on the firm’s new business figures.
“We expect an uplift in volumes as the year progresses as market conditions pick up and the proposition developments we have delivered gain further traction,” the company said.