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Clerical closes to new group pensions business

Clerical Medical has closed to new group pensions business, blaming tightening margins and lack of profitability in the sector.

No new group pensions schemes will be opened from 16 April 2007.
The firm says it will continue to service its existing book of group schemes, although head of Clerical Medical Keith Gilmour says he expects to lose some schemes as a result of the announcement.
Gilmour says the costs of chasing and adminstrating new schemes have become too high and says too many schemes are being switched from provider to provider.
He says some other providers have revealed impressive new business figures but says these businesses will also experience downward pressure on margins.
Gilmour says Clerical Medical remains committed to the individual pensions market, which currently accounts for half of its business. It will also attempt to improve services for its existing book and is setting up a ten-strong team to service employers and trustees across the UK.
The firm is also launching an investment series for IFAs off the back of its IFA advice modules.
It will write to IFAs and group pensions schemes to advise them of the renewed focus on existing group pensions business.
Gilmour says: “The costs of chasing and administrating new group schemes have become too great. Margins in the sector are extremely tight and many schemes are just moving from provider to provider.”


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