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Life Trust closes insurance arm

Life Trust has closed its insurance arm to new business as a result of difficult market conditions.

The firm says it would have had to raise capital later in the year to keep the subsidiary, Life Trust Insurance, afloat, after the economic climate impacted sales of its Longevity Income Plan and the recently launched the Longevity Risk Manager.

It says it explored every avenue but it has not been possible to raise further capital.

The LTI board is offering all policyholders the return of their original investment plus an ex-gratia payment equal to around 5 per cent. It would not confirm the number of customers it has.

The closure will see 13 redundancies in the UK and eight in Ireland, leaving just four staff at the firm.

Chief executive Andy Briscoe says: “We are taking this action having explored every avenue available to us and we believe this is the right decision for the planholders and the most responsible course of action.

“Because we are constantly having to lower our sales expectations due to the current climate it has showed we would need capital in about a year’s time to keep going and at the moment it is extremely difficult to raise capital. We could have ignored that and been irresponsible but we are in a position now to treat customers well and at the end of the day that is the most important thing.”

Briscoe hopes to bring the products back to market when economic conditions are more benign.

He says: “We will be incubating the products and maybe even creating new solutions as we go forward. I am very hopeful that at some point we can come back to the market because the truth is that longevity is not going to go away and the reaction we have got from IFAs have been encouraging. What we need to get an innovative product like this off the ground is a more benign market.”

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