News22 Jun 2010 15:56
Terry Murden: Sale rumours continue to linger as Aegon plots way aheadPremium Article !Your account has been frozen. For your available options click the below button.
Options
Premium Article !To read this article in full you must have registered and have a Premium Content Subscription with the The Scotsman site.
Subscribe
Registered Article !To read this article in full you must be registered with the site.
Sign InRegister
« Previous « PreviousNext » Next »View GalleryPublished Date: 22 June 2010
By Terry Murden
THE consolidation of the insurance sector has been a bit of an on-off affair for the past two or three years, turning it into a subplot to the wider and more headline-grabbing events in the financial services sector.
Prudential and Aviva were one-time favourites for merger, while Standard Life pulled out of a planned bid for Friends Provident.
Now we have Royal London, Britain's biggest mutual insurer, close to taking over Royal Liver, and Brit Insurance expec
ADVERTISEMENTting a higher offer from private equity group Apollo.
Clive Cowdery has made his intentions widely known, setting out ambitious plans to build his Resolution company through acquisitions – acquiring Friends Provident and now pursuing Axa's UK operations.
There will be others, though the latest speculation surrounding Aegon looks to be little more than that. The group chief executive Alex Wynaendts will address analysts and investors today amid rumours sweeping the Square Mile that the Edinburgh-based division is up for sale.
This looks unlikely. More probable is that Wynaendts will set out a more stringent set of demands for his underperforming UK business. A shake-up at the company in February led to some departures of key senior staff. The changes were announced as the group revealed that its life and pensions business for the year fell by 23 per cent to £943 million and the group booked a £183m impairment charge due to its investments in corporate bonds.
There was some inevitable speculation that the Dutch company was running out of patience with its lacklustre Scottish division and with Cowdery and others hunting for underperforming businesses Aegon was a sitting target.
New chief operating officer Adrian Grace gathered his troops together and told them they needed to "up the pace" of delivery as UK chief executive Otto Thoresen is under pressure to improve returns on capital and improve efficiency.
The squeeze is showing no signs of easing, as Aegon is a recipient of Dutch government support, so the company is required to meet new rules on the amount of capital they must hold.
Thoresen has split the management of the business into two new teams, one covering the group's life and pensions business while another oversees the distribution arm, including its national IFA brand, Positive Solutions. In a sign Thoresen is tightening his grip on the business, he will chair both board