Spain and Germany are the countries into which Clerical Medial wants to move
Clerical Medical is planning a major push into Germany and Spain, launching a host of new products as well as an e-commerce initiative.
The group has raised E400m in a subordinated capital issue to fund the development of systems that will allow the project to go ahead.
The main target market Clerical Medical plans to tap into is Germany. New pension legislation that will come into effect in the beginning of 2002 is expected to increase the sale of foreign pension products in Germany.
Clerical Medical already has a number of guaranteed growth funds for sale in Europe including Germany and it is likely that a similar type of product will be launched for the pension market for the country.
Roland Ward, finance director at Clerical Medical, said: 'We expect to have the new products ready for when the new pension legislation comes into effect.'
The equity markets have been extremely volatile and investors like the security of knowing that their financial product is guaranteed, according to Ward. Guaranteed growth products have already had success in Germany, Italy and Austria.
Part of the E400m will be used for Clerical Medical to enter into the Spanish market and a build a presence there. Similar guaranteed and unit-linked products will be marketed to Spanish investors. Ward added: 'We are already in talks with Spanish banks to be distribution partners.'
In addition, the capital raised from the issue will be to help build their e-commerce presence. Clerical Medical plans to establish online valuations and applications as well as illustrations. This is expected to take place early next year.
Ward said: 'We see substantial growth in Europe and have already established relationships with banks that we hope will become distribution partners through our talks with them.
'This transaction has received a very good response from the European fixed income investor base and we were delighted to have this opportunity to communicate Clerical Medical's business success in the UK and Europe. The issue will help us take full advantage of the strong growth we expect from our current business, as well as the opportunities provided by the acquisition of Equitable Life's operating assets and the HBOS merger,' added Ward.
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