Royal Liver is to launch a new-style with-profits investment product in the new year.
It has over three million with-profits policies on its books but says interest in traditional WP funds has dried up. Chief executive Steve Burnett says investors are still attracted to stockmarket-linked investments that offer smoothing.
He says: “We have stopped making old-style with-profits policies. We are working on a replacement which has similar features and suits our membership base, who can afford to invest but cannot afford to expose themselves to too much volatility.”
Cazalet Consulting principal Ned Cazalet says: “If Royal Liver is going to stay independent, it needs to write business but I am not sure if this will be profitable.
“Rightly or wrongly, advisers have been turned off with-profits and, as far as I am aware, sales of new-style with-profits bonds or smooth managed funds have tended to be disappointing. It could be a challenge.”