INCREASED pension activity and a solid start to annuity business helped Aegon UK produce record first-half sales, reports the Scotsman.
The paper says the Edinburgh-based division, which uses the consumer brand Scottish Equitable, saw new business in the six months to 30 June leap to £499m on an annual premium equivalent basis, up 55% from £321m in the year-earlier period, boosted by the overhaul of the pension system in Britain.
New business in the second quarter was up 59% to £282m, making it a record quarter for new business volumes.
The value of new business, which reflects margins, rose 61% to £53m, as a rise in demand for less lucrative individual pensions was offset by cost controls and strong protection insurance.
Aegon UK chief executive Otto Thoresen told The Scotsman:
"The increase in the value of new business demonstrates the new business we are writing and the growth we are achieving is associated with strong profitable growth."
Aegon, which bought Scottish Equitable in 1994, employs about 4,000 in Britain, of whom 3,000 are based in Edinburgh.
"A-Day" - when the pension reforms came into force - brought a 139% increase in self-invested personal pensions new business to £71m in the first half.
On the non-pension side, protection business increased by 58 per cent to £22m, while Aegon UK's annuity business, which it launched late last year, continued to build momentum, rising to £22m in the second quarter, up 27% from the previous three months.
"We have a strong share of the annuity market, which we intend to develop with more product innovation over the next six to 12 months," said Thoresen. "It has been good progress, but there is more to come."
It was a similar success story in the asset management division, with retail new business up 80% to £223m. This reflected the outstanding performance of the company's fixed income team, although Thoresen admitted the performance of equities needed to improve.
"The introduction of Andrew Fleming to run the asset management division in October 2005 has started to produce results," he said. "He has brought in significant experience to help the equity managers and has identified the areas he knows he will have to strengthen."
Thoresen acknowledged the unprecedented activity in the pensions market caused by A-Day would "slow somewhat", but said there was still restructuring work to be done for pension clients.
"We will still see heightened levels of activity for the rest of the year," he said.
MEANWHILE INSURER Old Mutual reported an 8% increase in worldwide life sales to £802m over the first half and said its Skandia acquisition had beaten expectations, reporst the Guardian.
It says unit trust and mutual fund sales rose 72% to £4.1bn. Old Mutual bought Swedish-based Skandia for £6.8bn this year in a move which reduced its dependence on South Africa.More than 60% of group sales now come from Europe. Chief executive Jim Sutcliffe said good progress had been made in all markets. The US business is "on track" and its retail savings operations in South Africa are seeing increased sales volumes again.IFAonline
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