Origen to become tied network as £18m PosSol costs hit Aegon profits

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Chief executive Adrian Grace

An £18m write down on the sale of Positive Solutions and £27m costs associated with the recent closure of its regional offices resulted in an £11m pre-tax loss for Aegon UK in the second quarter.

The provider’s Q2 results, published today, reveal the £11m pre-tax loss, compared to a £59m pre-tax profit for the same period the previous year and £23m profit for Q1. Year-to-date pre-tax profits stand at £12m, down 86 per cent on the £87m the previous year.

The results also reveal former IFA arm Origen is to be turned into a “tied agent network” for the provider. Aegon had previously announced the launch of a restricted arm for Origen advisers, using its ARC platform. But it now says all advisers will be tied to Aegon in all product areas.

Rather than separating out distribution profits, Aegon has now moved Origen’s figures into its pensions arm, which saw no profit for the second quarter, compared to a £7m profit for the same period in 2012 and £5m profit for the first quarter of this year.

Positive Solutions was sold to Intrinsic in June with Aegon taking a small stake in the distributor as part of the deal.

Aegon UK’s life business saw earnings before tax of £23m for the second quarter, up 53 per cent on the £15m for the same period in 2012 and 35 per cent more than the £17m in Q1. The provider says this was driven by favourable mortality and claims experiences.

Aegon says it now has 900 advisers using its ARC platform with AUM growing by around £100m a month.

The results also reveal a £13m impairment cost due to a corporate bond write down.

Chief executive Adrian Grace says: “We continue to divest businesses that are non-core to our future, such as Positive Solutions in the second quarter. We are also building and diversifying our workplace distribution capability and are delighted to have partnered with Mercers and Barclays in the first half of the year.

“Our platform has seen significant growth and is differentiated in the marketplace through its workplace ‘gating’ offering and its seamless transition for customers from accumulation to decumulation.”