Aegon chief insists ‘we are committed to UK’
Aegon has confirmed that a review of its UK annuity portfolio is underway, as part of a wider look at the group’s portfolio of business.
In an internal note, seen by FTAdviser, chief executive Adrian Grace stated that “following recent speculation in the media, I would like to confirm that Aegon has a long term commitment to the UK market”.
While he espoused the success of its platform and the differentiation of its ‘to and through’ retirement proposition, with the Secure Retirement Income guaranteed product, the message added: “as part of our on-going review of our portfolio of businesses, and our focus on drawdown and guaranteed products, we have initiated a review of our annuity portfolio in the UK.”
Mr Grace also pointed out that Aegon will continue to grow the platform both organically and through acquisition.
While the UK arm’s second quarter results, published last month, revealed platform assets reaching £4.6bn, the April at-retirement reforms resulted in higher outflows from the back book, something it expects to continue in the second half of 2015.
David Trenner, technical director at Intelligent Pensions, commented that several companies have sold annuity books, a move which is more reflection of where they want to go in the future than a reflection on the book itself.
“Aegon has never been a big player in the annuity market and I suspect that a large part of their book is from existing policyholders who did not use the open market option.”
He pointed out that Aegon has also never offered underwritten annuities, “which is the way the market is now moving, so I imagine this is a statement that they do not want to do them”.
Mr Trenner added that as the regulator could make underwritten annuities a requirement for all annuity sellers resulting in more “fringe players” being pushed to follow Aegon’s lead in looking for an exit.
peter.walker@ft.com
