Aegon’s Q1 results, published today (8 May), also revealed that the distribution arm did not make any earnings at all in the last quarter of 2012.
Furthermore UK Aegon reported that underlying earnings before tax declined 20 per cent to £20m in the first quarter due to “adverse persistency” in pensions and a “favourable” timing of expenses in the first quarter of 2012.
Earnings from pensions declined 69 per cent to £5m. Aegon said in its results that the negative effect from adverse persistency, which the UK insurance industry is experiencing as a result of the implementation of the Retail Distribution Review, amounted to £7m in the first quarter. This adverse effect is expected to continue at least into the second quarter of 2013. This was partly offset by the favorable impact from higher equity markets.
New life sales were also up 37 per cent to £244m, driven by strong platform, auto-enrolment and group pensions sales.
Platform sales accelerated during the first quarter of 2013, as more advisers were added to the platform.
Gross deposits, mainly driven by savings on the platform, continued to grow as the platform proposition gained momentum in the market and amounted to £42m.
During the first quarter, Aegon also broadened its distribution network for workplace savings by signing a corporate distribution deal with Barclays.
Aegon said that distribution partnerships such as this will prove to be “key” in this rapidly expanding market. Aegon also launched its auto-enrolment investment proposition offering employees straightforward solutions and a single fund right through to retirement.
Adrian Grace, chief executive, said: “Our sharp focus on our core markets has driven profitable new business. Our award-winning platform, ARC, and our new ‘One Retirement’ pension product, offer leading edge technology and unique functionality. Our platform proposition drives efficiency and value for money and results in an excellent customer experience.
“We’re seeing unprecedented demand for our workplace savings and at-retirement propositions, and this is just the start of things to come.
“We will continue to adapt and evolve, investing in emerging technologies that will ensure productivity, sustainable growth and excellent customer outcomes.”