Aegon agrees to sell Irish operation as earnings surge
● Chief executive Adrian Grace hails the company’s online investment platform
Life and pensions provider Aegon is to sell its Irish business after reporting a surge in second-quarter profits amid continued growth in its online investment platform.
AGER Bermuda Holding – a specialist in the European life “run-off” market – will pay about £162 million for Aegon Ireland. The business provideswealth management and retirement planning products to more than 25,000 customers in the UK and Germany, and has assets of about £4.7 billion.
The deal is set to complete by the first quarter of next year, and Edinburgh-based Aegon UK’S chief executive, Adrian Grace, said he was now reviewing the future of the firm’s offshore Secure Retirement Income product, which offers customers a guaranteed income for life.
He told The Scotsman: “I decided that, strategically, it was the right thing to do to exit [Aegon Ireland] at this moment in time.”
AGER executive vice-president Deepak Rajan said: “We see significant opportunities with Aegon Ireland. A presence in Ireland has been part of our strategy from the beginning and Aegon Ireland is a perfect fit for our growth plans.”
The deal came as Aegon UK said pre-tax earnings soared to €35 million (£31.6m) for the three months to the end of June, a sharp increase on the figure of €7m recorded for the same period last year.
Grace said the year so far has been “incredibly busy” for the Dutch-owned insurer, which employs about 2,100 people in Edinburgh out of a total workforce of some 3,200.
He said: “Let’s be clear, we’re helped by very strong equity markets, very tight controls on costs and retention being better than we thought it was going to be.
“We’ve got all the levers being pulled at the right time in the right direction.”
Assets on its combined platforms rose to £107 billion, up from £102bn at the end of the first quarter, with total assets under administration now standing at £151bn.
Referring to the platform, Grace said: “We started this business with nothing.
“To look at it now, I think it’s one of Scotland’s most positive success stories. It bodes well for the future as it continues to develop and support advisers.”
He added: “The platform growth is due to a combination of exceptional new business flows and buoyant stock markets and the combined platforms experienced net inflows of £3.2bn.
“It’s clear that despite macroeconomic uncertainty, advisers are in a bullish mood and are benefiting from a demand for advice, which is driving these flows.”
Grace said that last year’s purchase of Blackrock’s UK platform and the £140m purchase of the Cofunds platform business from Legal & General, completed in January, had “fundamentally transformed” the scale of Aegon UK, which has more than three million customers across the platform and workplace markets.