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Now Britannic&#39s closing doors to new business

Britannic Assurance is the latest life office to announce it is closing to new business.

The Britannic group will now concentrate on Britannic Retirement Solutions and Britannic Asset Management.

The group is aiming to assure policyholders that the closure is in their best interests. It joins firms such as Abbey Life, Equitable Life and Royal & Sun Alliance, which are all closed to new business.

In its annual results, Britannic confirms that it will not be paying bonuses to with profits policyholders or a dividend to shareholders this year and that it lost £249.7m last year. The closure of Britannic Assurance will mean up to 150 compulsory redundancies.

The Britannic with-profits fund is valued at £5bn and has one million policyholders.

The company says closing to new business gives it additional financial flexibility and it will manage the asset allocation as if it was open.

The agreement with Britannia Building Society, set up after Britannic closed its direct salesforce in 2001 to distribute Britannic Assurance products, has stopped with immediate effect. Other partnerships such as those with Irish Life will cease within six months.

The group says it has cut losses at Britannic Money but warns that the housing market is at the top and credit quality can only get worse.

Britannic group managing director Bryan Portman says: “We concluded regretfully that we could not maintain a competitive position and it would not be fair to with-profits policyholders to continue.”

Merrill Lynch analyst David Nisbet says: “This is another in a line of closures but it will not be the last. Britannic Assurance was no longer an important part of sales and the move will ease solvency concerns around its withprofits fund.”

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