Friends Provident has signed an exclusive distribution agreement for £25m with estateagency chain Countrywide in a bid to double its protection business.
Countrywide has bought the 104 estate agencies in Southern England from Friends Provident for £21m.
Under the terms of the deal, Countrywide, the UK's biggest estate-agency chain, expects to get a further £250m in commission over the 15 years of the tie-up.
In return, Friends will be the sole distributor of mortgage-related protection products sold through Countrywide's national chain of 738 estate agents, including brands Bairstow Eves and Mann & Co.
As part of the agreement, the estate agent's parent company, Countrywide Assured Group, will stop writing new life insurance business.
Friends managing director Ben Gunn says the move lets the company expand its protection business and move away from a reliance on with-profits products.
Gunn says the move is the opposite of the dash by life companies to buy estate agents in the 1980s. He says: “This is an excellent deal for us. It guarantees us a stream of new business and traditionally the housing market has been a great place to generate this.
“The history of estate agencies shows that it is difficult to use them to sell anything other than mortgage-related products. We only anticipate non-regulated products. But the whole market is moving because of CP121 and we cannot stand aside from that.”
Riach Independent Financial Advisers Bob Riach says: “I can see a lot more of this sort of thing happening. But the public will suffer through the lack of choice.”
Countrywide Assured Group has no links with the Misys network of the same name.