Sky News, which first reported the sale on Wednesday, said that Aegon had hired investment bankers at Citi to manage the sale which could generate substantial proceeds for the parent company.
In an internal memo circulated to Aegon staff from chief executive, Adrian Grace and seen by International Adviser on Wednesday, the company reaffirmed its long term commitment to the UK.
However, in the memo Grace said: “As part of our on-going review of our portfolio of businesses, and our focus on drawdown and guaranteed products, we have initiated a review of our annuity portfolio in the UK.”
Sources said that, while the sale of some Aegon UK businesses, such as its offshore bond operation in Ireland, had been rumoured as being part of the sale, that was not part of the current plan.
Platform stays
It was also not correct to say that investment management firm Kames Capital would be part of the sale and neither was Aegon’s platform business.
“We will continue to grow our platform both organically and through acquisition,” Grace said in the memo.
“We have built a market leading platform which continues to be the fastest growing platform both by percentage and in terms of asset growth. We have clear differentiation in our proposition “to and through” retirement and this is supported by innovative products such as Secure Retirement Income which is the only guaranteed product available on platform today.”
Aegon announced last month that earnings from its UK operations were up 9% to €34m in the second quarter, though the company did note this was mainly due to favourable currency movements.
However, it stated then that net inflows to its platform had nearly tripled to £1.0bn, due to a combination of new money coming in and the upgrading of existing customers.
Total assets on the UK platform reached £4.6bn by the end of second quarter of 2015 with the average customer policy size standing at around £72,000, which is more than double the amount for the traditional book of pensions and bonds.
Axa sale
Last month reports emerged that Axa was also looking to sell all of its UK business, including Axa Wealth, and had appointed Barclays to handle the sale.
A spokesperson for Axa declined to comment on the media reports.
Axa operates a range of business in the UK, including Axa Wealth, which includes investment manager Architas and the platform Axa Elevate, the private medical insurer Axa PPP Healthcare, and the general insurer Axa Direct and Partnerships.
Industry experts said the rumoured sales by Axa and Aegon indicated that big multinational companies in the sector were re-assessing their outlook for the UK in the light of the pension reforms, which remoived the compulsion on retirees to buy annuities.
