Aegon Outlines Cost-Cutting Measures, Closure of Two UK Businesses
October 11, 2010 by David Pilla
| Copyright: | A.M. Best Company, Inc. |
| Source: | BestWire Services |
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As part of an ongoing cost-cutting effort, Aegon NV said it will close two businesses in the United Kingdom and cut costs 25% while focusing on its core life insurance and protection segments.
Aegon said it will close its U.K. third-party pension administration and its employee benefits software businesses. The group will focus its efforts on its At-Retirement and Workplace Savings businesses. Aegon said it will also retain its closed book of business at Guardian Financial Services, which continues to provide the company with cash flow.
“A broad range of cost-saving measures will be introduced across Aegon’s U.K. businesses,” the group said. Among its measures, Aegon will streamline management and structure by the end of 2011, moves that will “result in the loss of a number of senior management roles over the course of the year,” Aegon said.
Aegon said it cannot predict the number of positions to be eliminated. The group will enter formal consultation with Aegis and Unite, unions representing its staff in the United Kingdom.
“Aegon has already taken a number of measures to restructure its U.K. operations, including the closure of its group risk business, its withdrawal from the bulk annuities market and the reorganization of the company’s U.K. sales division,” said Otto Thoresen, chief executive of Aegon UK, in a statement. Thoresen added those earlier measures eliminated 106 jobs at Aegon UK.
All of these measures are part of a strategy outlined by Aegon in June that would involve shedding non-core businesses and focusing on life insurance, pensions and asset management (BestWire, June 22, 2010).
In addition to the U.K. moves, Aegon said it would seek a buyer for its life reinsurance unit Transamerica Re.
Aegon said it would also look to “achieve greater geographical balance” by reallocating capital to growth markets in Central and Eastern Europe, Asia and Latin America.
(By David Pilla, international editor, BestWeek: David.Pilla@ambest.com)
