Clerical Medical International is closing with-profits as a fund link to its global investor bond product, saying it no longer makes economic sense to offer it.
It says that with-profits business through the bond fell from 85 per cent of its new business sales two years ago to just 2 per cent this year.
The Isle-of-Man-based firm is also axing its capital investor bond product which is aimed at corporate and trustee investors.
New business into with-profits through either bond will end on August 1. Clients can still switch existing investments into the with-profits fund but the minimal levels of new business means that marketing the product is no longer cost-effective.
CMI says it accepts that the closures mark an end to its dominance in the offshore market but says this is because it is repositioning its business structure to become more cost-effective. It says business previously done offshore through global investors, such as inheritance tax trusts, is now being offered onshore.
Senior marketing executive Jon Baker says: “If you look at our business figures, you could say our mantle of market leader has slipped but that is because we have refocused our structure. For example, IHT trust business has not stopped, it is just coming to us in a different way.”