Aegon recorded a loss of £530 million from the sale of its UK annuity book to Rothesay Life and Legal & General (L&G) earlier this year.
The Dutch-owned company sold £6 billion of annuity liabilities to Goldman Sachs-owned Rothesay Life in April. It then sold a further £3 billion of liabilities to L&G in May.
Financial statements for the company covering the third quarter of the year revealed that Aegon recorded a loss on its balance sheet of £530 million in connection with the deals.
This loss occurred due to the cost of reinsuring the annuities with Rothesay Life and L&G, which was £1.9 billion. This was partly offset by a £1.4 billion revaluation benefit following the deal, leaving an accounting loss of £530 million.
The annuity book sales also led to £13 million in expenses in connection to the deals.
Aegon did not break down its UK business figures as it has in previous years, but it did reveal that assets under administration on its platform rose to £11.2 billion. This was helped by moving 50,000 existing clients who held around £1.3 billion of assets.
Adrian Grace (pictured), chief executive of Aegon UK, set his sights higher than £11 billion ahead of the completion of the company’s £140 million deal to buy Cofunds from L&G.
‘The acquisition will give us the scale that is so critically important in the platform market. There was a time when the market thought £30 to £40 billion might be enough to be competitive over the long-term, but that figure now looks closer to £50 to 60 billion,’ he said.
Grace added that Aegon would provide advisers with more information about the acquisition at the end of the year, when it is expected to be completed.
Source: City Wire