Aegon returns to profit after cost-cutting but sales drop

A thorough restructuring of the UK operations product provider Aegon, which has seen it make a slew of redundancies across the business, has begun to pay off, with the company reporting second quarter net income of £38m compared to a loss of £15m in Q2 2011.

Although new life sales for the quarter declined to £170m from £191m last year, the company said this was in line with expectations.

Aegon’s underlying earnings before tax more than doubled year-on-year, reaching £20m compared to £9m in Q2 2011.

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The company is now seeing the results of a dramatic cost-cutting programme, which last September alone resulted in 116 redundancies as part of a plan to reduce costs by 25 per cent by year-end.

Adrian Grace, chief executive of Aegon UK, said: “While the positive impact of our restructuring programme has continued we have also been able to make some significant announcements about the future of the business.

“We launched the new platform proposition, Aegon Retirement Choices to the At Retirement market in November 2011 and this quarter we added the Workplace Savings proposition.

He added: “While new business was down in comparison to Q2 2011, these are in line with Q1 and reflect the reduction anticipated. We’re confident that our strategy will continue to drive new profitable business and deliver improved results.”