Aegon has scotched rumours that it is putting its UK life and pensions arm up for sale, but a strategic review will see it pulling out of the bulk annuity market.
Chief executive Alex Wynaendts says the UK business will cut costs by 25 per cent but will target what it describes as the growth market segments of at retirement and workplace savings.
But the insurer says it remains committed to paying commission on group pensions until 2012. It will also continue to develop its corporate wrap and sipp propositions to facilitate growth in what it described as its key markets of workplace savings and at retirement.
The announcement counters recent media reports that Aegon was planning to sell its UK operations, provoking speculation that they would be bought by Resolution. Aegon says it considered disposal and run-off of its UK business, but opted for restructure as the most profitable route.
Aegon says it will withdraw from the bulk annuities market in the United Kingdom because current pricing conditions mean that this business does not meet its profitability targets. The company will however continue to invest in the UK personal private pensions market.
Wynaendts says: “At this point we are not announcing an exit from commission for pensions. We want to expand in the UK. We are committed to developing corporate wrap and Sipp and will be investing further in these areas.”