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Shift from stakeholder boosts Widows’ pension business

Scottish Widows managed to grow its share of the pension market last year despite slashing commission and focusing on higher-margin business.

Chief executive Archie Kane says moving the group’s focus away from stakeholder was a key driver behind profitability growth last year and the firm will continue to home in on ways of delivering stakeholder in a more cost-efficient manner to the market.

Annual-premium life and pension sales rose by 9 per cent to 656.7 in 2004 from 601.7m in the the previous year. Of this total, 431.6m came through IFAs compared with 391.6m in 2003, an overall sales growth of 10 per cent for the IFA distribution channel.

Kane says the company’s share of the pension market rose from 7 per cent to 7.5 per cent. Scottish Widows’ overall share in the IFA market improved from 6.7 per cent in 2003 to 7 per cent last year.

He says Widows will continue with its “cautious” approach to multi-tie. The insurer has only one multi-tie arrangement at present and Kane says there are no further deals in the offing at present.

He says: “We are taking a cautious approach to multi-tie and we still see the independent channel as key.”

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