There are significant opportunities for us to develop and grow our intermediary business with you in the annuity market. With the projected increase in the number of retirees, there will be increased demand for annuities. As one of a small number of insurers with the balance sheet strength to write large volumes of annuity business, we’ve started developing propositions to meet this need.
We are currently exploring entrance into the intermediary protection market. With a protection gap in excess of £2trillion, there is already a substantial customer need for life assurance. Our existing expertise in life assurance through other channels means that we can utilise this to develop a compelling protection offering that will be specifically designed for the intermediary market.
We will work with you to develop both annuity and protection propositions, broadening our product suite and helping add value to our relationships with you. We’ll keep you informed as our annuity and protection strategies develop.
From 30 March 2012 our Global Investor and Corporate Investor offshore products will close to new investments for both existing and new bonds. The Portfolio Bond, Global Portfolio Bond and Corporate Portfolio Bond which are already closed to investments into new bonds, will from 30 March 2012 be closed to additional investments into existing bonds. Whilst Clerical Medical International (CMI) has historically been a leading player in this arena, we have recently seen falls in new business levels as a result of intense competition. We have carefully considered the highly competitive new business market place, the investment required and the returns available and concluded that we should reappraise our participation in this market.
It is paramount to us that we continue to provide you and our mutual offshore customers with the same high level of service that has been CMI’s trademark. We will therefore retain a significant Isle of Man presence to support and manage all existing business.
We appreciate you may have questions about our decision, to help answer these please read the FAQs. If you have clients with any of the above offshore bond products, we will be contacting them by letter within the next 10 days to inform them of these developments and to reiterate our continued ongoing commitment to them as valued clients.
Please note this decision does not affect other products. In particular, we continue to offer our onshore bond to the intermediary marketplace.
As the UK’s most trusted pension provider*, we will continue to invest in our individual and award-winning corporate pensions. We have already achieved significant milestones in developing our automatic-enrolment proposition. At the centre of this is our bespoke online automatic-enrolment software that will allow employers to comply with legislation, reduce administration costs, improve efficiencies and adopt a segmented pension approach, if required.
* IPSOS brand tracking survey February 2010
We are well advanced in the delivery of RDR propositions for our corporate and individual pensions. For us, RDR is not just about ticking a regulatory box. It’s about delivering robust, transparent product offerings with pricing and product flexibility to complement your advisory business models and support your clients as our industry transitions to RDR and beyond.
Find out more about RDR.
In addition to the key participation strategies outlined above, over the next three years we will continue to make significant investments. I’ve detailed below some of the new initiatives that are due to be delivered in the next 12 months.
We’ll continue with our programme of eCommerce delivery, ensuring that our service continues to improve and we remain aligned to how you want to interact with us. Developments over the next twelve months include a new suite of capability to support you in managing client reviews, as well as portfolio rebalancing and bulk switching capability. We will also be looking to exploit opportunities with our intermediary back office vendors to improve integrations thus providing improvements to end-to-end processing.
We will continue to ensure we have a current and compelling investment offer to meet the changing needs of your clients. Further investment will deliver:
- simplification of our Retirement Account investment selection processes
- additional Discretionary Fund Manager choices within Retirement Account
- enhanced online management of client investment portfolios.
We continue to build our capital base and remain one of the strongest and best placed providers in the marketplace to deliver these significant and exciting initiatives. This helps demonstrate our long-term commitment to the UK market, to your business, your customers and our aim to be your provider of choice.
I would like to take the opportunity to thank you for the support you have given to Scottish Widows and I fully appreciate the confidence that you have shown in us by continuing to place your valued clients with us.
I recognise that 2012 presents all of us with significant challenges and opportunities. I’m looking forward to progressing together to continue to build profitable businesses and I am genuinely excited about the future.
