Aegon continue cost cutting exercises

Wednesday, September 29, 2010

Dutch insurance market leaders Aegon have announced that they are planning to reduce business expenditure by up to one quarter this year. The insurers are reducing the services which they provide for their customers, aiming to focus more strongly upon the at-retirement sector, although they have stated that they plan to continue to provide life insurance and protection services within the United Kingdom, despite the scheduled cost cutting.

According to the company, their business divisions are all strongly behind plans to focus upon retirement products, following their recent closure of the third party pensions administration facilities. Aegon have also shut down their employee benefits software facility, having decided that these two sectors of the market are not a core element of their future business strategy.

Aegon have made a decision to retain their Guardian Financial Services business, which is showing a steady profit and strong business. Alex Wynaendts, the chief executive of Aegon NV has commented upon the decision to undergo further budgetary cuts: “The UK market continues to be a key element of Aegon’s business. The measures we are taking in the UK are essential to our larger objective of improving returns and sharpening our focus on the long-term prospects for our business.”

Aegon have already finalised plans to shave off around 80million pounds from their UK annual spending, by stopping unprofitable business practices globally. One of the services to be affected within the UK is the company’s provision of bulk annuities, and group risk services. Sales centres for Aegon have been halved recently, and job cuts have been made to the tune of over one hundred staff members.

The organisation is now collaborating with unions such as Aegis to discuss the possibility of undergoing further job cuts to reach their financial targets. According to the company, the planned changes will enhance, rather than detract from, customer service and support to both customers and IFAs across the sector.