Aegon UK recorded underlying earnings before tax up by 27 per cent to £28m during the first quarter of this year, driven by inflows to its suite of retirement platform offerings.
The firm’s Q1 results, published today (13 May), show that platform assets reached £3.8bn, with net inflows tripling to £900m. The firm now has 100,000 platform customers, while 25,000 direct customers were added to its retirement savings portal Retiready.
However, in spite of a fall in operating expenses of 18 per cent to £64m over the first few months of the year net income declined to £13m, due to reduced investment gains and losses when reporting the ‘fair value’ of assets.
Total new life sales also declined slightly to £199m, primarily driven by lower volumes arising from auto-enrolment.
During Q1 Aegon launched its new retirement income solution in time for the April pension reforms, while for the workplace market the Retiready “digital experience” will be launched in the coming weeks, as previously revealed by FTAdviser.
Also during the second quarter, the firm will launch its guaranteed pension drawdown product, building on its variable annuities business in the United States, although no more details were given in the statement.
Adrian Grace, Aegon UK chief executive, said: “We continue to innovate with our retirement income solutions and in Q2 we will be the first to launch variable annuities on platform.”
Mr Grace commented that he expects to see steady and continued growth of the platform business as the pensions freedoms start to take hold.
“The effects of the pension flexibilities and the growth of drawdown are already visible with total assets under management in drawdown doubling in a year and up 20 per cent since Q4 alone.”
He also reiterated previous statements that Aegon will not compete with advisers by buying back into distribution, rather assisting them with technology, field based support and service.
In general, Aegon warns it expects the liberalisation of pensions rules will result in higher outflows from its back book.
“This is expected to be caused by an increased level of lapses and claims for the remainder of the year, although actual levels of outflows are difficult to predict,” read the document.
As for the protection business, the firm’s “growth strategy” has delivered a 14 per cent increase in sales, with a promise of digitising and streamlining the overall protection service proposition to reduce processing times and improve the customer experience.
peter.walker@ft.com
