Clerical Medical International (CMI) has denied rumours that it bought 100% stakes in three distribu...
Clerical Medical International (CMI) has denied rumours that it bought 100% stakes in three distribution companies based in Germany. But Chris Evans, head of sales and marketing at CMI in Luxembourg, has admitted the company is reviewing its agreement with three master distributors and expects to "deepen the relationships" later this year.
This comes a month after CMI decided to stop its master distribution agreement with European Business Network (EBN) Luxembourg and less than a year after it took minority stakes in five distribution companies involved in the cross-border and German markets. The stakes, which average around 30%, are in EBN, Protrust Germany, VSP, EMS and Master Financial. Two years ago, CMI acquired German intermediary firm Lorne International in a joint venture with Protrust.
Evans said it uses three master distributors in the German market – VSP, EMS and Securuum. "We keep these relationships under review and are looking to deepen them with the three distributors."
He admitted, however, that sales in Germany this year have been relatively slow after the strong end to 2004. Sales last year benefited from investors buying regular premium policies before a tax change on 1 January 2005. Until the end of last year, investors could take 100% tax free gains from regular premium policies as long as they were held for 12 years. Now they only receive 50% tax free gains and can only take these when aged 60.
"We have launched three pension saving plans to take advantage of the new tax regime," says Evans. "We expected the market to be slow at the start of 2005 as investors were using their allocation from early this year at the end of 2004 to take the last chance to use the old tax regime. Interest started to pick up at the beginning of March and we are very optimistic about this market."
Lloyds 'not entitled' to give notice
Alternatives to alternatives?
Our weekly heads-up for advisers
Patience must be a watchword
'Misleading, unclear, unfair' promotions