Aegon, the Dutch insurer that owns Scottish Equitable in the UK, yesterday said there would be 450 job losses at the company this year, but pledged to expand its business in Britain.
The company, which employs around 5,000 people in the UK and is headquartered in Edinburgh, announced 18 months ago that it was streamlining the business by between 600 and 800 jobs. Hundreds of jobs have already been taken out of the business as part of that plan and an additional 200 sales staff were axed six weeks ago. Aegon said that by the end of this year, its headcount will have come down by 450 on 2003 staff figures. The company hopes to make most of the job losses through natural wastage, and most of the areas destined for cutbacks are in administrative functions.
Many insurance companies, battling against government-introduced price caps, are reducing the numbers of their employees. Standard Life recently axed 350 sales jobs and Norwich Union has outsourced 3,250 to India.
David Henderson, chief executive of Aegon in the UK, said yesterday: "We continue to develop our structure to adapt to the requirements of the ever-changing marketplace. Our key values are scale, profitability, cost efficiency and flexibility. Product providers need to make an economic return."
Aegon UK yesterday reported a 12 per cent drop in pre-tax profits of £130m, but sales were up 8 per cent to £635m. Fourth quarter profits leapt 41 per cent on the same time in 2002, as a turnaround in consumer confidence took hold.
The company has been dogged by fears that its Dutch parent would pull the plug on its UK operations. However, Mr Henderson said the group wanted to become a top three player here. This pledge to expand has stoked speculation that it may be interested in buying Standard Life, which could be worth around £4bn, and it yesterday refused to comment on whether it was interested in making a bid.
Aegon could make a number of cost synergies from taking over Standard. It is also based in Edinburgh and it would satisfy Aegon's ambitions in the UK.
The company has circled a number of rivals in recent years, including Royal & Sun Alliance and Britannic, but has so far diverted resources to snapping up firms of independent financial advisers. City analysts have dismissed a takeover, however, saying that Aegon does not have the spare cash for a multi-billion pound takeover.Reuse content