Updated: Hundreds of jobs may be under threat after Aegon today unveiled plans to cut costs across its UK life and pensions business by 25% over the next 18 months.
Announcing the plans, group CEO Alex Wynaendts said the measures would "have an impact on employment".
According to reports, Wynaendts said job losses may be "commensurate" with the 25% cost-cutting plans, although a spokesperson for Aegon UK said non-payroll cuts would be made first.
"We always try to minimise compulsory redundancies and we will work closely with the unions, Aegis and Unite, to ensure the impact on jobs is minimised."
Dutch insurer Aegon today said it would attempt to cut costs in the UK by 25%, a move which Wynaendts said equates to about £80m worth of cuts annually.
The UK business will withdraw from the bulk annuities market because the current pricing conditions are hitting profitability.
Aegon says it is seeking to improve return on capital by refocusing the business on the "growth market" segments of at-retirement and workplace savings.
The company adds it will continue to invest in the UK personal private pensions market (SIPPs) and group pensions. Its distribution arms, Positive Solutions and Origen, remain unaffected by the changes.
Aegon says the measures are aimed at improving return on capital from 2.7% in 2009 to between 8% and 10% by 2014, and generating cash flow of about £625m between 2010 and 2014.
Wynaendts said the company has introduced the measures because it was "not satisfied" with the current returns on capital in the UK.
He said the group had considered "all options" for its UK business, including "full disposal", "run-off" and restructuring.
"We are taking steps to focus on our core business and will continue to allocate capital to those businesses and markets that offer higher growth and returns over the long-term," he said.
"I have full confidence the management team in the UK is committed to this restructure and realising its intended benefits."
Trade union Aegis, which represents Aegon's UK employees, says it is concerned by today's announcement.
"Whilst it's reassuring that Aegon remains committed to the UK, the scale of change has come as a blow to our members," general secretary Brian Linn says.
"At this point, we don't have any details how these changes and cost savings can be achieved. We need to see a breakdown of the company's proposals before we can assess the likely impact on our members."
Aegon UK yesterday moved to deny reports suggesting its Dutch parent was preparing to offload its British life and pensions business for £1.5bn.
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