Scottish Life ends society ties

Click to follow
The Independent Online
SCOTTISH LIFE, the Edinburgh-based life insurance company, said yesterday it would end its ties with two building societies that introduce business to it - Portman and Staffordshire, writes Nic Cicutti.

The company said the cost of selling its policies through the two societies was out of proportion to the amount of business it was getting.

Brian Duffin, general manager, said Scottish Life would now sell its financial products only through independent advisers, who already provide nearly all its business.

Scottish Life manages assets worth pounds 3.6bn, placing it among the top 15 UK life insurers. Its total of new regular-premium business will be about pounds 50m this year, with Portman and Staffordshire contributing about pounds 1.7m of that amount, or 3 per cent.

Mr Duffin said: 'Since the Financial Services Act came into force in 1988, we have had to spend more and more on training and compliance for those who act as our appointed representatives. The new standards being required of sales staff by the industry's regulators make it an expensive business. If you spread those costs through a large network of representatives, then it makes sense. In our case, there was little point.'

Ties with Portman will end by 30 June next year and those with Staffordshire in 12 months' time.

Ken Culley, chief executive at Portman, said Scottish Life's decision had been expected for some time. Peter Evans, general manager at Staffordshire, said his society understood the commercial reasons behind the move: 'We are sad because we have had a very good relationship with Scottish Life.'

Comments