the wind-up of jersey-based operation signals group's intention to focus on core UK markets
Scottish Widows closed its Jersey-based subsidiary Scottish Widows International (SWI) to new business on Thursday last week.
The closure of SWI, which has just £250m in assets under management, will not effect existing policies with the offshore group, Scottish Widows said. Scottish Widows blamed the closure of the operation on its failure to win sufficient market share in the offshore investment arena.
However, even though the policies already written will continue to be administered, no further premiums can be added as SWI will soon not have the capacity to deal with new money at all.
Although no policies will be closed, existing investors will see the choice of funds available for switching reduce over time. This will be a gradual process as SWI reduces the number of external fund links available for policyholders within SWI's offshore bond products, Scottish Widows said.
Any business submitted to SWI within the 30 days prior to the deadline of 31 October can be cancelled. Trail commission will continue to be paid to intermediaries on existing policies as long as they remain in existence.
Investment sales director at Scottish Widows International Ciaran Woods said the closure was an admission that the group had failed to make a meaningful impact in the offshore investment arena.
Woods said: 'At Scottish Widows we aim to be a leader in each of the markets in which we operate. While our offshore business has been successful, we are not a major player in this market. We have decided, therefore, that we can better support the IFA market by focusing on our core UK pensions, investment and protection business.'
The closure of the business adds to the increasing number of redundancies in the UK investment industry. The firm said that after a number of staff were relocated to other roles within the Lloyds TSB Group, there would be around 20 job losses.
Letters have been sent to policyholders and their financial advisers and a full explanation of the effects of the closure has been posted on the internet at www.scottishwidows.co.uk
For further information call 01624 690800.
Partner Insight: Continuing the Architas education series for clients.
What made financial headlines over the weekend?
290,000 already affected
Putting the tech into protection
Square Mile’s series of informal interviews