THE INVESTMENT COLUMN: Brighter future for life insurers
Tuesday 01 February 2005
While falls in its protection business could be explained away by the sharp slowdown in the mortgage market - which generates more than 50 per cent of this division's sales - the drop in its core group pensions business was more alarming.
Friends blames this on an increasing number of companies not wanting to alter their pension arrangements before the wave of regulatory change sweeping the sector is over - a plausible excuse. However, it conceded that the next six months could also prove tough for its groups pensions business. Many advisers are telling company pension managers to steer clear of Friends until the merger between F&C and Isis, the company which invests Friends' clients' money, has bedded in.
Yet there remains plenty to be positive about at Friends. Having secured a good number of ties with financial adviser networks over the past six months, it is one of the better placed insurers to take advantage of "depolarisation", the new rules on where financial products can be sold. It hasn't yet signed up a big bank to sell its investment and pensions products, but it stands every chance of securing a deal over the coming months.
New revenue streams are also promised, as Lombard International, its recently acquired offshore business, begins to contribute - and as Friends launches a marketing push in individual pensions.
At 160p - a little more than 1.2 times its embedded value, the City's preferred valuation measure - Friends is not overpriced, and remains a worthy shareholding for existing investors. For those looking to get fresh exposure to the life insurance sector, however, stocks such as Legal & General and Prudential promise to perform better in the short-term.
- 1 I was a Woman Against Feminism too
- 2 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 3 Students offered grants if they tweet pro-Israeli propaganda
- 4 The Tory donor whose firm is one of Britain’s biggest tax avoiders - with HMRC's blessing
- 5 John Barrowman praised for Commonwealth Games opening ceremony gay kiss
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned
Peaches Geldof: Her final day – and her fatal decision
Students offered grants if they tweet pro-Israeli propaganda
Israel-Gaza conflict: Israel may have committed war crimes, says UN human rights chief
Peaches Geldof inquest: Tragic final days of mother-of-two's life reveal she lied to husband about failed heroin tests
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
iJobs Money & Business
competitive: Progressive Recruitment: This really is a fantastic chance to joi...
£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...
£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...
Negotiable: Harrington Starr: Market Administrator (1st line Support, Bloomber...