Aegon, a Netherlands-based provider of life insurance, pensions and investment products, has said that it will restructure its UK unit and may sell its US life reinsurance unit Transamerica Re, as it seeks to raise money to repay the Dutch government.

According to Aegon, restructuring in the UK unit is expected to reduce the costs by 25% and lead to a return on capital of 8-10% by 2014. The restructuring will involve exiting the bulk-annuities market in the UK to focus more on strengthening position in private pensions.

Aegon, which acquired Transamerica Re in 1999, feels Transamerica Re has a limited strategic fit with its core business and hence it is looking for a suitable buyer. Transamerica Re is just a portion of Aegon’s Transamerica Life Insurance operation in the US.

Alex Wynaendts, CEO of Aegon, said: “Aegon is focusing on areas with ‘higher potential for growth and higher returns’. The group’s strong capital position and the opportunities for change in the insurance industry that he sees coming as a result of the challenging market environment.”