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Announcement : Aegon keeps protection but shuts pension admin division

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Aegon today provides further details on the implementation of its plans, announced in June, to restructure and refocus its business in the United Kingdom. In keeping with its aim to sharpen its focus on the At-Retirement and Workplace Savings markets and reduce operating costs by 25% AEGON has considered how all its businesses fit with its new strategy. As a result it has decided to close its third party pension administration and its employee benefits software businesses as these businesses are not core to its future proposition.

Aegon has explored the strategic options for its back-books of business and has decided to retain the closed book of business of Guardian Financial Services, which continues to provide a steady cash flow to the company. Aegon will also retain its life insurance and protection business, given that it supports the company’s aim to focus on the At-Retirement market in which Aegon maintains a leading position. A broad range of cost saving measures will be introduced across Aegon’s UK businesses. To support these measures, Aegon will implement a streamlined management and organisational structure which will be in place by the end of 2011. This will result in some changes to reporting lines and the loss of a number of senior management roles over the course of the year.

In keeping with its statutory obligations under UK employment law Aegon will soon begin formal consultation with Aegis and Unite, the trade unions that represent its staff in the UK, regarding the impact of planned restructuring measures on employees. Consequently, Aegon is not in a position at this time to detail the number of positions affected.

Commenting on progress within the UK business, Alex Wynaendts, CEO of Aegon N.V. says; “The measures we are taking in the United Kingdom are essential to our larger objective of improving returns and sharpening our focus on the long-term prospects for our business. By reducing costs, improving service levels and focusing on those market segments where we have leading positions, I am confident that we will create a more efficient organisation, better positioned to respond to market opportunities and the developing needs of our customers. The UK continues to be a key market for Aegon and we are committed to pursuing the future opportunities from a position of strength.”

“The decisions we have announced today follow a thorough review of our businesses and how they fit with our new strategy announced in June. Our new approach will see Aegon concentrate on the At-Retirement and Workplace Savings markets, which are already positions of strength for us in the UK. It’s important that we continue to move forward with our restructuring programme to create a more efficient business, improve returns and ensure our long term success” Aegon UK Chief Executive Otto Thoresen said.

Aegon has already taken a number of measures to restructure its UK operations, including the closure of its group risk business, its withdrawal from the bulk annuities market and the reorganisation of the company’s UK sales division. This reorganisation, announced earlier this month, will result in a net reduction of 106 roles.

Aegon’s strategy is to increase long-term returns and focus on the opportunities developing within its core businesses: life insurance, pensions and asset management. Today’s measures follow a thorough review of Aegon’s businesses in the United Kingdom to ensure that it meets the company’s requirements in terms of earnings growth, cash flow generation, return on capital and focus on the life cycle needs of customers.

Source : Aegon Press Release