Friends Life will continue to ‘regionalise' it's international operations and capitalise on RDR achievements to comply with increased regulatory constraints globally, confirms John Van Der Wielen, managing director of the firm's international businesses.
Commenting on the firm’s interim results for 2011, Van Der Wielen said that despite a 6% increase in sales volumes “International operations had been impacted by difficult market conditions, mainly in Germany.”
Van Der Wielen says a strategic review of international operations was well underway for release in the second quarter of 2012, but in the meantime the focus will be on growth markets and higher margin products. Van Der Wielen confirmed that Friends Provident International will be rolling out the latest Friends Provident International regular premium unit linked savings product to Hong Kong, Singapore, and United Arab Emirates in the third quarter of this year.
In addition, the plan to appoint regionally-based heads will continue, with Isle of Man remaining the global distribution hub. “Part of our strategy is to regionalise the business. We already have a number of licenses in places in the Far East and Middle East and we will continue with this approach. The Isle of Man is certainly a good jurisdiction to write business for rest of the world,” says Van Der Wielen. Lombard will continue to the be main distributor for products within Europe.
Van der Wielen believes a further boost to international growth prospects will come in the form of the UK’s Retail Distribution Review (RDR). “The UK is leading the way in this area and as less mature markets follow a similar path, I believe the international division is well placed to respond and take advantage of our skills and strength in this area.”
The International division achieved a 6% increase in sales volumes in 2011. IFRS operating profit before tax was £40m in 2011, compared to £95m in 2010, mainly due adverse one-off costs not expected to recur. Operating profit figures for Lombard were slightly up from £33m in 2010 to £38m in 2011 due to increased market share, although its sales volumes were 22% down on 2010 figures.
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