Advisers fear wider protection retreat
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Advisers are concerned that Aegon’s possible withdrawal from the UK protection market could signal a wider contraction of the protection industry.
Aegon is to conduct a review of its UK protection arm and other non-core business areas which is due to complete at the end of September.
Highclere Financial Services partner Alan Lakey says: “We have a lot of consolidation right now. Is this because protection is not profitable? Or could it be the strictures of UK regulation are such that it makes it difficult for companies to prosper?”
P3 Wealth Management managing director Frank O’Donnell says: “I think that Aegon pulling out of the UK would be disastrous for the protection market. We have fewer and fewer players now, which is going to reduce consumer choice and stifle innovation.”
Axxis Financial Planning director Owen Wintersgill says: “This industry is shrinking very fast. I hope this trend does not escalate. If it did, it would be to the detriment of the range of products that we can offer.”
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Readers' comments (4)
Anonymous | 25 Jun 2010 10:46 am
there are 2 bigger issues with UK Protection business. The first is weak companies that don't seem to be able to make money from this market. Hence consolidation. The second is weak advisers who do not address clients protection needs.
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Evan Owen | 25 Jun 2010 11:40 am
Does the new government want the same as the previous myopic bunch? Does it want the UK to go the same way as Germany with five shades of grey being flogged by a bank salesforce with 25% persistency rates?
Anybody remember the 'good old days' in the UK when the situation was very similar?
Back to the future!
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Norm d'Plume | 25 Jun 2010 2:41 pm
I recently took out a £250k whole life cover, which costs about the same as my 5 year renewable and convertible term 20 years ago.
Either I was being ripped off then or the premium isn't sustainable now (or both).
Regulation was supposed to be about consumer protection. Tell me how pricing insurers (and IFAs) out of the market is doing that...
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Lacey Jones | 25 Jun 2010 3:21 pm
So another provider will go. How many will have to go before the FSA realise that the draconian measures being introduced topped off by Solvency II will only harm a group of people - the consumer
It is probably true that prices are too cheap and unsustainable for term assurance. But whilst the desire for market share continues it will be a downward spiral.
Hats off to people like Scottish Provident, BUPA and LV who try to hold on to their ideals
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