Aegon UK predicts 40 job losses with individual protection portfolio sale
Pardon the Interruption
This article is just an example of the content available to mallowstreet members.
On average over 150 pieces of new content are published from across the industry per month on mallowstreet. Members get access to the latest developments, industry views and a range of in-depth research.
All the content on mallowstreet is accredited for CPD by the PMI and is available to trustees for free.
Approximately 40 jobs will be at risk at Aegon UK following the insurer’s decision to offload its individual protection book, it has told mallowstreet.
The comment from Aegon comes after its announcement on Tuesday that it would sell the portfolio to mutual insurer Royal London, subject to court approval.
The business is expected to be transferred to Royal London in 2024, following the completion of a court-approved Part VII transfer. In the meantime, Aegon UK will reinsure the portfolio to Royal London.
A spokesperson of Aegon said 40 of colleagues in the UK are impacted by the announcement, adding: “We are supporting them through this difficult time. Impacted colleagues have been informed their roles are at risk and consultation with the appropriate unions is ongoing.”
Aegon UK’s individual protection business is a portfolio of life, critical illness and income protection policies for 400,000 high net worth individual customers, which was sold via independent financial advisers. The portfolio closed to new business on 4 April.
The Dutch insurer said the decision to divest the business supports the company’s strategy to focus on the core retail and workplace platform activities in the UK.
Both Aegon and Royal London declined to disclose the value of the deal.
Aegon said the transaction is not expected to have a material financial impact on the capital position and operating capital generation of Aegon UK and its main insurance legal entity, Scottish Equitable.
Asked about its approach when choosing a buyer, Aegon said Royal London emerged as its preferred buyer following a “robust tender and due diligence process".
“Given their [Royal London’s] position and reputation in the protection market, we believe this is the right decision for our business and for our customers,” Aegon’s spokesperson said.
Royal London’s chief executive Barry O’Dwyer said the transaction is a “perfect strategic fit” due to the advised nature of Aegon’s individual customer base.
He said: “We are strong champions of the adviser community and of impartial advice, and we look forward to supporting advisers through this transaction, making sure there is no disruption to their businesses or to their clients."
O’Dwyer added: “Combined with over 900,000 existing customers who already trust Royal London to protect their families against life shocks, this transaction strengthens our position in the UK protection market. Our reputation for outstanding customer service means that customers and advisers will be reassured that they are in safe hands.”
Royal London said there will be no impact on its employees as a result of this transaction.
Will more insurers expect to streamline their business in 2023?
