Insurer Aegon yesterday lifted the uncertainty from its Edinburgh-based UK business by appointing to its global management board the man who has driven through a critical £80 million a year cost-cutting programme.
It said Adrian Grace, installed at the helm less than a year ago, had hit a 25% reduction target, while revealing a grim set of fourth-quarter financials as redress costs for historic pensions failings jumped to £171m from the £100m previously estimated.
Alex Wynaendts, Aegon's chief executive, said of Mr Grace, who joined Aegon three years ago: "Adrian has played the leading role in planning and carrying out the transformation programme currently underway within our UK business."
He added: "His appointment to the management board reflects the continued importance our business in the UK represents within our strategic priorities and we look forward to benefitting from his extensive experience and insights as we address the broader opportunities and challenges for Aegon's businesses."
Aegon UK revealed that as a result of the programme, numbers employed at its headquarters in Edinburgh have dropped from 2500 to 1900, and from 3600 to 2700 across the business.
However, around 250 have transferred with sold businesses and a further 200 work for the asset management arm now rebranded Kames Capital.
Mr Grace, as development director then chief operating officer under then-chief executive Otto Thoresen, was instrumental in tackling the Scottish Equitable pensions crisis, which prompted an investigation by the Financial Services Authority and a £2.8m fine in December 2010.
A redress programme for failings dating back years was begun in May 2009, three months after Mr Grace's arrival.
Aegon was ordered by the FSA to repay £60m to customers, but last November that was revised to £100m, and yesterday it emerged that the redress programme had reached a final total of £171m.
Aegon UK's spokeswoman Lesley McPherson said: "As
they looked into the project further, it just became clear there was further redress to be made."
She added: "Two of the biggest problems Adrian inherited when he became CEO have now been laid to rest, and all of the cost-cutting is behind us."
Mr Grace, formerly with GE, Sage, HBOS and Barclays, whose rapid ascent continued when Mr Thoresen was suddenly appointed chief executive at the Association of British Insurers last March, said: "Aegon UK successfully tackled some major historical issues in 2011 and this has had a negative financial impact in the short-term."
He added: "Our 25% cost-saving target has been met and our customer redress programme is drawing to a close. Our platform proposition has been warmly received in the market. We are fully focused on the future and ensuring we take maximum advantage of the opportunities that lie ahead with the retail distribution review and pensions reform."
Aegon's new life sales fell by 20% last year to £852m, and one continuing headache for Mr Grace is its distribution business – the Origen and Positive Solutions financial adviser firms – where combined losses doubled to £2m in the fourth quarter.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article