Crunch switches focus to boost protection business
Share
AES International says the economic downturn has strengthened the offshore protection market, with sales likely to remain strong in the medium term. Managing director Sam Instone says the lack of new money in the Middle East from the credit crunch has seen advisers shift their focus from investment bonds to protection to suit the economic environment.
He says: "In the absence of new money in the Middle East or the ability to properly service new money and provide wealth management and conventional financial planning services, product salespeople go back to selling protection policies. In a bull market with new money going into investment bonds they sell them and in a bear market, because there is no new money in the system, no one wants to invest and the markets are dropping, people sell protection."
Zurich International Life has reported a dramatic rise in protection sales so far this year, with business up by over 70 per cent year on year at the end of August.
A Zurich spokesperson says: "We are hopeful of achieving an 80 per cent increase on total business written in 2008. A majority of our protection business is generated in the Middle East but we are working with our distributors to promote more protection sales in Hong Kong and Singapore."
Instone says: "For the next nine months, the market is looking pretty flat so until people want to really get back into the market and invest, I think they will keep on selling lots of protection in the short and medium term."
Friends Provident International says sales of its protection products in the Middle East region have almost doubled on levels from last year and it is working with advisers to offer products and tools to meet the clear demand.
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
