Life offices are under the spotlight again this morning, after Friends Provident and Legal & General...
Life offices are under the spotlight again this morning, after Friends Provident and Legal & General revealed their financial status and new business figures, says the FT, while AMP revealed plans to "spin off" some its UK operations.
AMP says it will demerge its financial services and funds management businesses along geographic lines - Australasia and the UK, so it can take a £1bn writedown and shake off Pearl, NPI and London Life - all of which are still or have been in serious financial trouble.
It seems Friends Provident is faring better than most, according to the FT, as it reported a 10% rise in sales on an annual premium equivalent basis, which measures regular premiums and 10% of single premiums, to £92m.
Legal & General, however, reported a fall in new business for the first quarter as growth in group pensions was offset by a fall in demand for individual life products.
L&G saw a 4% fall in sales on an annual premium equivalent basis - which measures regular premiums and 10% of single premiums - to £223m, though this was still at the top end of the range forecast by analysts.
Both firms are heavily reliant on their UK business.
Royal & SunAlliance is under fire too, as it has cut its bonus rates for the second time this year, says the Scotsman.
Changes to rates will affect around 800,000 pension and endowment customers, says the Scotsman. And while annual bonus payments will remain intact, the terminal bonus paid at the end of the with-profits contract is to be cut by 10% - potentially costing investors thousands of pounds.
R&SA already saw its terminal bonuses reduced by 5% and said further cuts were likely.
The number of complaints about precipice bonds has already climbed to over 2,500, says the Daily Telegraph which has the latest figures from the Financial Ombudsman, as nearing maturity reveals massive losses.
Around £5bn is believed to have been invested in these stock market-linked bonds by about 250,000 investors with high street banks and insurers, say the Telegraph. Some of the biggest are due to mature next month and investors will lose millions unless stock markets rise sharply.
A fall in the number of first-time buyers hitting the market is finally causing sale and price of homes to slow, say Nationwide figures published in the Times.
For the first time in 12 months, economists at the Nationwide say the value of homes was unchanged in April, lowering house price inflation to 22.2% from 26.2% in March.
After 12 months of record growth, Nationwide Building Society yesterday said that the value of the average house was unchanged in April.
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