Prudential could gain significant distribution in the building society sector by nailing its colours to with-profits distribution, says a top independent analyst.
Cazalet Consulting analyst Ned Cazalet believes the post-depolarisation carve-up could enable the Pru to overtake Legal & General and Norwich Union, the biggest players in the sector.
Axa and Zurich also have links to a handful of societies but Cazalet believes the winners will be those that set their multi-tie agenda early on. Both providers are firmly entrenched but Cazalet believes the option to tie to more than one provider could prompt many societies to change allegiance.
The Pru has slimmed down its product range to a core of four or five products, including corporate pensions, which it plans to sell in large volumes.
Cazalet believes building societies will wield new control with providers following depolarisation. He thinks the Pru will aggressively target with-profits distribution to get a foot in the door. A strong line of attack could enable it to corner a lot of the sector while other providers dither over which areas to concentrate upon.
Building Societies Association spokeswoman Rachel Blackmore says: “Societies will want to retain any relationship they have but may turn to other providers for with-profits if only some offer it.”