Scottish Widows’ corporate pensions sales surged by 29 per cent in the first half of 2013, from £2.86bn to £3.69bn, driven by pre-RDR commission-based business.
Lloyds Banking Group, the parent company of Scottish Widows, last week published its half year results for 2013.
The bank’s insurance division, which includes Widows, posted underlying pre-tax profit of £564m, up 12 per cent from the £502m figure recorded in the first six months of 2012. Underlying profit excludes ‘exceptional items’, such as PPI redress payments.
Corporate pensions sales increased 29 per cent, from £2.86bn to £3.69bn. However, individual pensions sales dropped by 19 per cent, from £911m to £738m.
Retirement income sales rose 1 per cent, from £369m last year to £374m this year.
Total sales across insurance were down 1 per cent, from £5.63bn to £5.55bn.
A Scottish Widows spokesman says: “The growth in corporate pensions sales is built around the pipeline generated in the run-up to the implementation of the RDR. That is business written on a commission basis.
“Going forward, we have more work to do getting ourselves in a more fee-based, nil commission space. The pipeline for that looks very encouraging.”
Corpor-ate Benefits Consulting director Allan Maxwell says: “Scottish Widows and a number of other providers were actively buying business last year.
“The concern I have is around churning and whether schemes were being rewritten that did not really need to be.”
Advisers provided the primary source of insurance sales growth for Widows, with the firm’s intermediary channel delivering 15 per cent year-on-year sales growth, from £3.89bn to £4.46bn.
Direct sales rose 26 per cent, from £348m to £437m. However, sales through Widows’ bancassurance channel slumped 53 per cent, from £1.39bn to £651m.
A Widows spokesman says the drop in bancassurance sales relates directly to Lloyds’ decision to withdraw provision of investment advice in its branch network.
In addition, the insurance division paid a dividend of £1.6bn to Lloyds Banking Group earlier this year.