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GE motors on into pensions as NatMut is scrapped

National Mutual is to disappear from the IFA market, having been swallowed up by new owner GE Capital, the financial subsidiary of the biggest company in the world.

Only seven months after the deal was announced, National Mutual is vanishing and an enlarged GE Life takes over from April. The result is a business specialising in advicedriven pension and retirement products.

For a company with a market capitalisation of £277bn and 313,000 employees in 100 companies to swallow a 100-year-old mutual with assets under management of £4bn is not really a surprise.

But it was initially a surprise that GE bid for NatMut in July 2001 as many thought it was too small to be of interest. After being linked with Equitable Life, Royal & Sun Alliance and Scottish Life, it seemed GE was falling foul of the old proverb, always the bridesmaid, never the bride.

GE Insurance Holding chief executive Clive Cowdery says: “People ask why we would want to buy little National Mutual. Where does it fit in the huge behemoth of GE? People do not realise this is not an isolated purchase. We are a global acquisitive player. This was a normal thing for us.”

Looking at what GE Life currently does in the UK, it starts to make a little more sense. GE Life has seven million customers in the over-50s market, selling equity-release plans, annuity products and guaranteed bonds.

It says drawdown and self-invested personal pensions have been in its sights for some time and GE has been considering growing organically in these areas. So when NatMut came up for grabs it seemed a sensible move as it has long been a specialist pension provider, operating entirely in the IFA market providing Sipps, SSASs and drawdown products.

GE Life managing director David Evans says: “GE Life was formed on a demographic focus rather than a product basis. The over-50s market is growing – around 80 per cent of wealth is sitting in this market. We want to concentrate on the advised sector, so NatMut was the ideal fit for the gaps in our portfolio.”

GE descended and started a speedy integration process, which it says NatMut found “refreshing”.

Cowdery says: “Nothing about GE is halfway. We do not like drift. The secret of our success it to never sit on the fence – are you in a market or are you out of it? Is there sustainable competitive advantage or not?

“We buy and integrate around 100 companies a year and we use the same approach whatever their size. It is about process, communications, agreeing common goals and dealing with the hard issues very quickly.

“One of the first things we said was we are not always right. You have to be open and transparent about all your strengths and weaknesses.”

GE conducted extensive research with IFAs on its brand and market position and found no desire to see the National Mutual name stay.In these volatile times, the financial power of GE was seen to outweigh any attachment to NatMut.

The combined business will be pushing developments in the annuity market and is looking at expanding its long-term care range with a product for immediate usage.

The financial strength of GE and its huge global brand would make it appear to be in the perfect position to launch into stakeholder. But GE does not like being in business where it will not make money.

Although it is keeping a keen eye on the market, the new broader-based GE Life is firmly focused on making a major play for advice-driven specialist retirement planning business.


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