Aegon UK, the life and pensions giant which employs some 3000 staff in Edinburgh, said it was on track to meet its targets for market share and new business growth after a strong first nine months.

Aegon UK, the life and pensions giant which employs some 3000 staff in Edinburgh, said it was on track to meet its targets for market share and new business growth after a strong first nine months.

Aegon said it expected to have a 10% share of the UK market by 2010, by which time it expects moves to develop a more profitable sales mix should help it achieve margins of 20% on new business.

The confident prediction came after Aegon, which sells pensions under the Scottish Equitable brand, released figures showing strong growth in the first half was sustained in the third quarter, albeit at slower rates.

Aegon UK said based on the standard industry measure of new annual premiums plus one-tenth of new single premiums (API) it recorded new life and pensions business of £907m in the first nine months, up 18% on the same period last year.

The company highlighted the fact that, on the new business volumes measure, profitability increased by 41% to £118m.

This reflected a more profitable mix of business, helped by growth in areas such as sales of individual annuities, up 58% to £107m API, and individual protection business, which rose 8% to £34.2m.

Individual pensions new business increased 20% to £299m. Operating earnings rose 21% to £138m, while corporate business increased by a more modest 8% to £330.7m.

Otto Thoresen, chief executive of Aegon UK, said it had achieved a strong level of profitable new business growth which was ahead of most of its competitors.

He was pleased that the company had achieved good growth in areas where it saw lots of potential, such as individual annuities and protection.

New distribution deals agreed in the first half with Barclays Bank and Dunfermline Building Society had boosted business.

"We are strongly positioned to achieve further growth as the UK long-term savings market develops in the years ahead," said Thoresen.

However, growth was slower in the third quarter than in the first half, during which new life and pensions business increased by 21% while the value of new business volumes rose by 48%.

The key asset management operation, which manages funds for Aegon and for third parties, recorded mixed results in the third quarter.

Thoresen welcomed the fact that retail fund sales increased by 35% to £445m, compared with the same period last year.

The improvement was driven largely by sales of fixed income products.

However, the value of new institutional mandates won in the third quarter fell by 64% to £118m, from £329m in the third quarter of 2006.