pulling unitised with-profits pension fund option in favour of more transparent products
Royal & Sun Alliance (R&SA) has withdrawn its with-profits fund option for new pension members in order to focus on simpler, more transparent products..
The with-profits option was withdrawn from the R&SA Lifestyle Investment bond and non-stakeholder pension products on 1 January 2002 in a bid to pre-empt the increased costs with-profits funds are expected to face as a result of tighter regulation and greater transparency.
Funds will remain open to allow current policyholders and pension schemes to continue making contractual payments.
As part of the group's strategy for 2002 UK life and pensions business, greater focus will be placed on building its IFA corporate pensions business. The group aims to increase its 17% market share of the group risk and group pensions market, however it will still be taking individual pension and protection business.
Neil Southworth, research and development leader at R&SA, said the group's strategy will be rolled out continuously over the next 12 to 24 months. One of its newest developments also includes the creation of bespoke protection products, Southworth said, as intermediaries have found they need different products depending on whether they are talking to business managers and company executives or dealing with inheritance tax planning.
Steven Pater, managing director of UK Life and Pensions, said this is a continuation of the strategy taken in 1999 to focus efforts on the intermediary sector, which now accounts for 85% of R&SA's new life and pensions business.
He said: 'Our decision to withdraw unitised with-profits options from our products has been motivated by several factors, not least the market uncertainty surrounding with-profits and the significant investment in time and capital that would be needed to develop the with-profits products of the future.
'We are aiming to add value to our relationships with customers and intermediaries by focusing our efforts on key strategic sectors where we have the skills and capacity to grow our business further in 2002.'
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