Scottish Amicable takes the European plunge

SCOTTISH AMICABLE is the first life insurer to take advantage of a European Union directive that comes into force today, giving insurers based in one member country a 'passport' to operate in all EU and European Free Trade Association countries.

Scottish Amicable's launch of a pan-European subsidiary to sell its investment and protection products contrasts with recent moves by other insurers. Commercial Union announced a planned takeover of the French insurer Groupe Victoire earlier this month. Although other UK insurers have subsidiaries on the Continent, takeovers and joint ventures have been the usual route to large- scale Continental expansion.

Paul Bradshaw, chief executive of the new subsidiary, said acquisitions and joint ventures were both relatively expensive. The company would use wholesale distribution channels - it relies on independent financial advisers and appointed representatives in Britain - so it would not need to set up a direct sales force in each country.

Mr Bradshaw said the products would first be tested in Britain, while Germany was the second target market. 'It is the most protected and perhaps the toughest market to crack, but its size and relative under-insurance make it a priority.'

Roy Nicolson, managing director of Scottish Amicable, said: 'The home market is easiest for us, but it is very competitive. There is greater long-term potential in other European markets.'