Aegon UK has reported a 27% increase in new business value to £157m for last year, on the back of a 12% rise in life and pensions sales.

Although it did not divulge figures for business outflows, Aegon said it was a net gainer of business.

Chief executive Otto Thoresen commented: "What we can say is we continued to be strong net winners through '07, we were definitely writing more business and significantly gaining in terms of cashflows. It is also fair to say that the market is seeing an issue still in terms of persistency (of policies) outcomes."

Aegon said operating earnings increased by 20% to £185m, driven by its successful product and channel diversification strategy. During the year, it had built important new distribution to enable it to reach new customers, while achieving growth in annuities, protection, and in the asset management business.

On recent criticism by Scottish Life's chief John Deane that several established players in the group pensions market were paying "suicidal" levels of commission, Thoresen said: "We have done a number of things in our corporate pension business and reduced the overall levels of commission we pay. We are quite happy about the way we see our business developing at the moment we still believe commission has its place."

He said he was "particularly pleased" with the progress of the asset management business under Andrew Fleming. "We are beginning to sell equity funds in volume for the first time in a number of years."