Tony Nightingale, managing director of European Business Network (EBN) Luxembourg, has come out figh...
Tony Nightingale, managing director of European Business Network (EBN) Luxembourg, has come out fighting after Clerical Medical International revealed last month that it had ended its master distribution agreement with his IFA network.
He declared that contrary to some market rumours, EBN is not only still operating but is "expanding". Nightingale said: "In 2004, we had an increase in regular premium business of 350% and 20% in single premium policies."
Nightingale admitted that trading margins reduced last year but income rose by around 20% from B16m to B20m. He added that EBN gained pre-tax profits of B1.14m in 2004.
He also shrugged off CMI's decision to end its relationship with EBN Luxembourg. "We largely concentrated our sales efforts on the German insurance market in late 2004 to take advantage of a tax change to the treatment of compliant insurance policies," he said.
"While these financial results, which remain subject to independent audit, generally support the strategy and focus that was taken by EBN's management, it is common knowledge among EBN's distributors that the majority of its business activity during the year was directed to one life insurance company [CMI]."
Nightingale added that this business model could not be sustained given the imminent implementation of the Insurance Mediation Directive (IMD) in Luxembourg as it could lead to EBN being deemed a tied agent. "EBN is now committed to materially expand the range and quality of products that it might introduce to its target market to avoid regulatory pressures to otherwise act as a tied agency of any single product supplier," he said.
"The company is restructuring its organisation to take advantage of various development opportunities. EBN also intends to focus more effectively on established strategic interests in the Austrian, Belgian, Italian, Baltic and Swedish markets and is considering extending distribution arrangements with committed European cross-border life companies."
View from the front row
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