View more on these topics

Industry mesmerised by the lure of new business

The life sector was slammed by Friends Provident chief executive Trevor Matthews for its “insatiable” appetite for new business.

He said: “Our industry took its eye off the ball in recent years. The embedded value accounting system did not help, with its over-emphasis on new business and new business profits.

“The industry became mesmerised by new business, writing it at too high a cost, acquisition costs were unsustainably high, product complexities were designed and concealed commission and poor sales behaviour was condoned rather than stamped out.

“Our hunger for ever-increasing new business numbers was insatiable. Just like people at large, our short-term wants overrode our long-term needs.”

Cazalet Consulting director Ned Cazalet told delegates: “The UK life assurance sector spends about £12bn a year, of which £7bn year in year out is spent on writing new business. We have been burning money like it was going out of fashion.”

Recommended

Cavendish sets up five sub-funds

Cavendish Asset Management is launching five new equity sub funds under its Cavendish Investments Funds Oeic. They include European, Asia Pacific fund, North American, Japan and technology funds.

Pension complaints up by 10%

Complaints about poor service by pension providers have increased by 10 per cent in the past year, according to The Pensions Advisory Service. TPAS handled almost 8,000 complaints about personal and occupational pension policies in the year to the end of March, despite industry initiatives such as Options, to speed up pension transfers.

Elephant in the room

When not immersed in personal financial planning, I am a keen amateur photographer.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    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

    Email: customerservices@moneymarketing.com