AKG Actuaries & Consultants has come under attack following its report to intermediaries on the fina...
AKG Actuaries & Consultants has come under attack following its report to intermediaries on the financial strength of offshore life companies.
The research, which is designed to be used by advisers as part of their product provider selection process, gave nine out of the 18 companies only satisfactory or weak ratings. Some offshore life companies have been left outraged by the results, claiming that they did not provide AKG with information for the report and that the rating given was unjustified.
Isle of Man Assurance (IOMA) received a weak or C- rating. However, Antony Kelsey, life development and technical manager at IOMA, said: "As far as we are aware we have not seen the questionnaire, nor did we see a copy of the report before it was published.
"AKG was not provided with financial information regarding the company and do not see how we can be rated as weak. We are not obliged to give financial statements as we are an independent organisation and only have to provide information to the regulators."
There were two types of reports for offshore life companies. Sponsoring companies received a full report that involved regular meetings and other communications with AKG to back up information in the written questionnaire. Non-sponsoring companies received a 'short report' that involved only answering a questionnaire on their report and accounts and long-term business operations.
Out of the 12 short reports, three-quarters received ratings of satisfactory or weak and none received a very good (B+) rating. All sponsoring companies received a B+ rating.
Guy Vanner, communications director at AKG, said: "The companies were rated financially on the information that they provided to us. If a company did not wish to provide certain information, AKG took a view on the cautious side and the rating would have reflected this. All companies were issued a copy of the report before it was a published and were given a chance to respond."
However, Vanner also admitted that it was possible for a sponsoring company to outline their strategy and parental attitude more easily in a meeting than it was through a questionnaire.
If a point in the questionnaire needed clarification, although companies that had a short report were contacted over the phone, it was easier to explain points in a face-to-face meeting, Vanner said. Scottish Life International (SLI) did not sponsor the report and only received a B- rating. However, chief executive David Kneeshaw is relaxed about the fact.
He said: "We do not feel there will be any future problems for the company regarding financial strength as we have the backing of our parent company Royal London behind us. Business is improving at SLI and has been up 30% in specific markets."
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