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ScotAm exits endowments as sales continue to slide

Skandia&#39s London marathon team all made it round the course last weekend, raising around £60,000 for charity Get Kids Going.

The team of 32 included Money Marketing journalists James Daley and Rachel Stevenson, runners from Fidelity and Threadneedle and IFA Torquil Clark pensions development manager Tom McPhail.

McPhail completed the course in 3hrs 43mins while Skandia pensions marketing manager Peter Jordan, who organised the team and was champion fund-raiser, made it home in a personal best of 4hrs 21mins. Jordan raised an additional £7,000 by having his head shaved before the marathon.

Scottish Amicable is pulling the plug on its range of endowment mortgages with immediate effect following plummeting sales.

The company, a subsidiary of Prudential, was one of the biggest providers of endowment mortgages.

The move follows two years of sliding sales which have seen ScotAm&#39s endowment business from IFAs fall to £3.46m last quarter from £14.35m in the first quarter of 1999.

It joins its parent company and other insurers, including Legal & General and Scottish Equitable, in withdrawing from the endowment market.

ScotAm says the move ref-lects the shift in the marketplace away from endowments to repayment mortgages following the discovery by millions of borrowers that their policies may fail to pay off their mortgage at completion of the term.

Council of Mortgage Lenders figures show endowments now account for only 7 per cent of all new loans compared with around 60 per cent eight years ago.

During the same period, repayment mortgages have rocketed in popularity and now make up 80 per cent of new loans from 20 per cent in 1993.

ScotAm says it aims to focus on selling protection insurance to repayment borrowers but remains committed to the mortgage market.

Public relations manager Darragh Leeson says: “We are an IFA-supporting company which concentrates on providing products that independent advisers are actually able to sell. We will now move with the market and focus on alternative product solutions.”


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