Robust risk management, prudential regulation and a resilient UK economy will ensure stability in the life insurance industry over the next 12 months, says a Standard & Poor’s report.Eighty-five per cent of ratings in the UK are currently stable, according to the Life Insurance Industry Risk Analysis report, the first of it type carr-ied out by the ratings agency. Since S&P revised its outlook on the UK market to stable from negative in September 2004, there have been no rating changes on UK life insurers, apart from the negative outlook on Standard Life, A+/negative/A-1, and the positive outlooks on The Equitable Life, B/Positive/–, and Abbey National Life, A+/Positive/–. S&P says conditions will remain stable over the next 12 months due to a combination of factors, including favourable equity markets and new regulation. The agency says regulatory and accounting changes imp-lemented by the FSA are positive for the long-term credit quality of the UK life sector and have contributed to improvements in risk management practices among insurers. The report also shows that IFAs are still the dominant distribution channel in the sector. In 2004, 63 per cent of new business was sourced through IFAs, 27 per cent through single ties, and 10 per cent through non-intermediated channels. Banks have continued to be less successful at generating insurance sales in the UK than in many other European markets. Norwich Union’s parent company Aviva was the biggest player in the life and pension market in 2004, generating 12 per cent of market share. Standard Life followed closely with 11 per cent of new business, HBOS on 9 per cent, Legal & General, Lloyds TSB and Prudential on 8 per cent and Aegon on 7 per cent. S&P primary credit analyst Mark Button says: “The pressure on profitability from external factors such as the low interest rate environment is forcing insurers to be increasingly active in managing business mix, cost and balance sheets to protect and enhance earnings.”
The Invesco Perpetual Aim VCT will offer 25m in new ordinary shares in January 2006. The trust launched in June 2004 and was the most successful by a new entrant into the VCT market, raising 25.1m through an offer for subscription.
The ABI and Aifa are renewing their defences against claims management firms with new guidance telling members to compensate consumers direct. The trade bodies want to raise awareness that consumers can deal with firms directly for free and do not have to hire claims management firms, which on average will take a quarter of their […]
Preferred Mortgages appoints director of sales and marketing and director of operations with immediate affect.John Webster, joint managing director, has decided to leave the company to pursue other opportunities while joint managing director George Patellis is leaving to return to America.Head of sales Roger Taylor becomes director of sales and marketing and chief operating officer […]
Those who know me well, know of my long-standing love affair with vintage scooters: Italian, German, Spanish, even a weird Indian bike called the Kelvinator Avanti. I have owned and ridden many beautiful machines in my time.
By Fiona Tait, Pensions Specialist Since the announcement in March, the Lifetime ISA (LISA) has attracted controversy. Heralded as a saviour for the self-employed and the young wanting to get on the housing ladder, the new LISA risks adding confusion for savers trying to fully understand the benefits of new workplace pension savings through auto-enrolment. To […]
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Another investment manager offering enterprise investment schemes has alerted clients of a 10 per cent drop in value for one of its portfolios following new Mifid rules. Mifid II, which came into force on 3 January, requires firms to notify clients when the overall value of their portfolio, relative to its value at the beginning of each reporting […]
The recent enquiry by the work and pensions select committee has reignited the debate about the future of collective defined contribution schemes. Whether these sort of schemes can be incorporated into the current UK pensions landscape is a moot point. Let’s consider some of the arguments for and against CDC. First of all, it is […]
Retirement interest-only mortgages are set to become more popular following the FCA removing hurdles to selling them. The regulator sees RIO mortgages as a possible aid to the waves of maturing interest-only loans with no repayment strategy. However, the FCA also wants RIO mortgages to be sold more widely, for example as an additional option […]