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Zurich UK Life profits down 39% as sales slump

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Zurich suffered a 39 per cent drop in UK life operating profit during the first half of 2013, from £98m last year to £60m this year, as sales plummeted 33 per cent.

The insurer’s results for the first six months of the year, published this morning, reveal sales fell from £376m during the first half of last year to £252m. 

Zurich says this reflects a drop in retail bond business as a result of the RDR and lower volumes in its corporate savings business. 

It says the profit figure for the first half of last year was skewed by “one-off reserving benefits” which have not been repeated this year.

Zurich UK Life chief executive Gary Shaughnessy says: “Our market share in individual protection has reached double figures for the first time, continuing the growth we have seen over the last few years and our group risk business has become the market leader in group life new business. 

“This success has been achieved despite the difficult market conditions which have seen the protection market shrink.

“Initial growth from our retail platform launch is further reinforcing our figures and we are very pleased with the increasing number of advisers using the platform. At the same time, the level of assets moving onto our retail platform has increased. 

“Our corporate savings business has maintained its momentum with a pipeline of schemes soon to come on board.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. How many more companies will have to show results like those of Zurich and the PRU that will make the FCA realise that consumers are not seeking advice as paying for advice upfront rather than over a period as was the case pre RDR.is just not on..

  2. And this is a shock ?

    That old restriction of trade argument with the OFT moves ever closer !

  3. The old life offices will mostly be out of the advised market within 3 years as they find the margins are now just too small for investments and pensions. Most will look to market direct via platforms and through protection and some will make money in the group market,at least until AE finishes ,but the days of the BDM ,sales teams and managers who tick boxes are soon to end and new blood in the industry will disappear. So consumer choice and completion will also reduce and will the public end up with a better service overall? No of course not and the industry will only have itself to blame for allowing the politicians to destroy it ,using a sledgehammer to crack a nut,brilliant!

  4. Coincidentally or not, yesterday I received a cheque for the proceeds of an Investment Bond I had held with Zurich. It had been recommended to me by a now-retired IFA (I’m a consumer) in 2002.

    The principle reason I decided to move away from Zurich was the hassle to deal with them.

    Nothing to do with RDR, but everything to do with having no on-line facilities to switch funds (written instructions only), premium rate calls to the call centre (average cost around 70p), near impossible to find current price of the funds on-line (even their call centre struggle).

    Zurich has global ambitions and priorities and their UK service and systems may not be a high priority. I also understand that many experienced staff at all levels have taken redundancy in the recent past.

    You wouldn’t bet on sales and retention improving if my experience is typical.

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