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Naive view of free-asset ratios

I find Patrick Connolly&#39s article last week to be naive in the extreme. There is little doubt that the free-asset ratios of most insurance companies are now in single figures and vulnerable to further stockmarket decline.

There is no doubt that reserves need to be replenished and that means poor bonuses over the next few years, whatever happens to share prices.

It is laughable that Connolly considers Standard Life as one of the more solid investments because in June before the latest crisis, a senior Standard Life actuary visited me claiming that free reserves were down to 9 per cent last year, a figure they were comfortable with and they were continuing to invest over 80 per cent of funds into equities.

The figure must surely be nearer 0 per cent now and I wonder whether they are now investing in bank deposits.

Andrew Harwood by email


NDF links to Eurostoxx for 11th time

NDF Administration has established the 11th edition of its extra income and growth plan.This guaranteed equity bond has a term of three years and two months. It gives investors a choice between growth of 33 per cent, annual income of 10 per cent or monthly income of 0.78 per cent. It tracks the performance of […]

New Misys business &#39could package products&#39

The floated Misys IFA business could offer financial services products branded in its name.As part of a raft of proposals to expand the business ahead of its planned flotation, Misys is looking at packaging products in its name. It also wants to target bancassurers and other new entrants into the post-CP121 environment with outsourced technology […]

Outside Edge

House price inflation is peanuts. Insurance salesperson inflation is the new hot ticket. Five life companies have clubbed together with other investors to buy 18 per cent of a business (Millfield Partnership) that lost over £7m on a turnover of just over £20.5m last time around. The price appears to value each adviser at £251,462.Aviva […]

IFA calls for help to fund Gambian girl&#39s surgery

A Devon-based IFA aims to raise £10,000 to fly a seven-year-old Gambian girl to the UK for major plastic surgery after she suffered third-degree burns in an accident last year.Castellan Asset Management director David Goss met Fatou Ceesay when he visited her village in The Gambia last November. Six months earlier, Ceesay was badly burnt […]

CGT entrepreneurs' relief

Entrepreneurs’ relief is due, subject to meeting certain conditions, in respect of capital gains arising on ‘material disposals of business assets’. These ‘business assets’ include: Read more


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