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‘Living Time buffeted but unbowed in the storm’

The whirlwind in global fin­ancial markets has obviou­sly been a huge challenge for Living Time along with advisers and their clients, testing not only the strength of dem­and for our products but our relationships with the IFAs who recommend our plans.

Two weeks on and we have been left with an even greater belief that what Living Time does and what we stand for in the retirement planning world is hugely valued and appreciated by those at the heart of the industry.
We have directly contacted hun­dreds of IFAs through phone calls and face-to-face visits and sent thousands of email updates answering their questions and addressing their concerns to the very best of our ability. The overriding reaction has been one of support and goodwill. Those actively recom­mending our unique fixed-term annuities to clients are keen to keep on doing so because they recognise that nothing else combines the same simplicity, security and flexibility.
Our plans were created in the belief that the majority of people who have saved into a pension do not want to leave themselves vulnerable to inv­estment performance risk for their retirement income but do want to keep their options open to deal with changing circumstances in the future.
The value of the absolute inc­ome and capital guarantees off­ered by Living Time plans has been a source of reassurance to advisers and their clients during the last two weeks.
One of the most common questions I have been asked is whether Living Time is owned by AIG. We are not. Living Time is a privately owned business. We chose American Life Insurance Company to act as our underwriter. Our plans are underwritten by the UK branch of Alico.
The UK branch is operated and governed by the same rules and regulations as other pension companies operating in the UK which are required to hold assets that match or exceed the liabilities of policyholders. These assets are ring-fenced for the sole benefit of pol­icyholders, so there is no question that they could be switched to support any other needs. At the time this article goes to print, the Standard & Poor’s rating of Alico, a well capitalised FSA UK-regulated life and pension company, is A+.
I also get asked by advisers whether AIG plans to sell Alico. This is not something I have any knowledge of, other than what I have seen in an interview on TV where the new AIG chief executive Edward Liddy made it clear that its life and pension operations are a core long-term holding rather than a satellite business earmarked for sale to raise cash.
He said: “We are going to keep them solid, we are going to keep them well capitalised and well funded.”
But even if AIG did decide to sell, the buyer of Alico would still be bound by the same rules and regulations that curr­ently apply and the FSA would take very strict measures to ensure that policyholders are not treated unfavourably in any way. Changes in ownership of life and pension companies in the UK are something we have become familiar with.
Financial advisers are a robust and rounded set of professionals and have seen many storms over the years. As we see calm and confidence returning to the market, all our focus at Living Time returns to doing the best job for our advisers and their clients.
For example, we continue to innovate in the retirement income space and are app­roaching the final development phase to launch a range of new services for advisers before the end of the year.
We are determined and passionate to stimulate change in what we feel is an inefficient market. Why is it in the UK today that more than nine in 10 people end up buying a lifetime annuity and, of these people, eight out of 10 select a level income? Why is it that only one in three people utilise their open market option? We bel­ieve, as do many of you who have registered for our campaign, that change is essential. We are planning to implement the next phase of our Offer More Options campaign.
In this phase, we shall be taking our campaign to major employers and trustees of the big pension schemes. Our aim is to demonstrate that their employees and members are not being offered sufficient choice as they approach retirement and at times defaulting into one retirement income option, rather than being off­ered the choice of many that exist in the market today.
Thank you to all advisers who have weathered the storm. Thanks also to those who regis­tered to show their support at and have continued to demonstrate high degrees of professionalism and calm during a turbulent two weeks.
You can be assured that Living Time will not stop fighting until real change is effected
that will improve the lives of consumers and advisers and imp­rove the health of the financial services industry as a whole.


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