View more on these topics

Cazalet predicts Standard bonus cuts and curtailing of new business

Independent insurance industry analyst Ned Cazalet believes Standard Life has only two options to recapitalise if the FSA believes its capital position is as dire as he thinks it is.

In a release issued over the weekend, Cazalet says he belives the capital position is relatively unchanged from the 2002 year end, but this was still cause for concern. He suspects the FSA now holds a similar view to Cazalet Consulting.

on Standard&#39s capital position and says it may result in the mutual insurer having to reduce the amount of new business it does, cut bonuses and reduce payouts more than most other life offices and reduce its with-profits fund equity weighting from around 55 per cent to Cazalet&#39s suggested 25 per cent.

Cazalet says the debt markets are effectively closed to Standard because of the little “equity-type capital” it has and that recapitalisation would almost certainly need to be carried out hrough demutualisation and flotation or trade sale.

He goes on to say “heads would need to roll at the top of Standard Life” to make floatation a credible proposition for new investors. Cazalet says: “In our view, heads would need to roll at the top of Standard Life to make this a credible proposition for new investors subscribing hard cash to rebuild the company, which has blown more than £12bn of capital during the past three years, much of which was lost on account of Standard&#39s reckless and financially imprudent leadership.”


FSA cuts FSCS funding

The FSA is cutting operational funding for the Financial Services Compensation Scheme by 4.8 per cent to £11,839,000 from 12,435,624. The regulator says the cut is due to increasing efficiency within the compensation scheme. FSCS head of finance Nick Gooderham says the reduction in the scheme&#39s management expenses levy reflects further savings made by the […]

Out of context

•”I think it&#39s time for me to find a new boyfriend.” – AITC PR executive Jemma Jackson expresses disappointment with the dressing gown and slippers she received for Christmas. •”You don&#39t need a passport but you do need protection.” – Scottish Widows head of marketing Peter Jordan on a forthcoming trip to Wolverhampton. •”First I […]

An education in communication

We have an industry embroiled with working on developing products, imp-roving the regulation surrounding products and reviewing the legislation within which our industry works. But are we missing the point? Of course we need to get the infrastructure of our industry right and we have to welcome all moves to improve. Yes, reviews, consultation papers […]

Turn-round as IFAs back move to rethink status

IFAs have overwhelmingly backed Standard Life&#39s decision to consider demutualisation despite having championed its policyholders&#39 rejection of a carpetbagging attempt three years ago. Seventy-three per cent of respondents in a poll of 117 Positive Solutions RIs say they endorse the move, a massive reversal from early 2000 when 89 per cent of IFAs supported policyholders […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm