Aegon denies report of £1.5bn UK sale

Aegon UK has denied a report suggesting its Dutch parent is preparing to offload its British life and pensions business for £1.5bn.

The Mail on Sunday said the insurance group would provide an update on its plans to leave the British market at an investor meeting on Tuesday.

However, an Aegon UK spokesperson says the rumours are "pure speculation".

Aegon UK has two million customers, manages about £53.6bn of assets and employs 4,900 staff.

The insurer's proposed move will allow it to focus on more high growth markets - such as central and eastern Europe, Asia and Latin America, he paper says.

Aegon needed €3bn of Dutch Government funding during the financial crisis. In order to meet European Commission requirements, a number of groups which received state aid, such asING and KBC, have already agreed to sell assets.

The report comes as speculation mounts about insurers abandoning the UK market to look for more lucrative opportunities in areas such as the Far East.

Many commentators believed if Prudential's bid for AIG's Asian business had been successful, its UK arm would have been sold to fund the deal.

However, Aegon appeared committed to the UK market and decided to raise its profile in 2006 by adding the name to different parts of the business such as Scottish Equitable.Aegon is also currently sponsoring British Tennis in a bid to make the brand better known to UK consumers.

In Q1 2010, Aegon UK had reported an upswing for its life and pensions business with earnings at £25m; up 178% compared with the same period in 2009.

UK life and pensions new business, on an API basis, was £235m which was an increase of 5% on Q4 2009, although a decrease of 7% on Q1 2009.

Names in the frame to acquire Aegon UK could include Clive Cowdery's consolidation vehicle Resolution, which bought Friends Provident last year. However, the entrepreneur is already poised to announce a £2bn rights issue to help fund a take-over of the bulk of AXA UK.