What about the workplace pensions market?
I am looking forward to getting our products into the workspace but right now we will not have a solution. It is high up my development agenda because the fit, especially in the defined-benefit pension space, is a good one.
We are looking at non-performing guarantees in an ‘old world’, in terms of the guarantees people thought they were receiving. Individuals and firms are looking for solutions to support those guarantees.
In our view, the structure of the unit-linked guarantee is much more sustainable than the old methodologies around DB schemes, which have been found to not work.
What are your plans for Europe?
We launched in 2006 and were one of the first providers of guarantees like this into the UK. We have a branch of Aegon Ireland in Frankfurt, Germany, and we also engage with counterparts in France, but the UK is the key market in the short term.
We are aware of the commitment it takes. However, once we have established a foothold in Germany and have had continued success there, we will be looking to other markets as well.
How is the offshore bonds business doing at present?
We have a big book of offshore bonds we manage, with more than £3bn ($4.7bn) of assets under management.
It is still a business for us in which we are seeing moderate growth, but not an area we have focused on over the past couple of years, as we have really scaled up on the guarantee side of our business.
So while the market size has plateaued in the past couple of years, especially since the highs of 2008/09, in terms of the potential for future growth it really is around guarantees.
