By Leo Bland Royal & SunAlliance is to take over new group life business for Zurich Life as Zurich p...
By Leo Bland
Royal & SunAlliance is to take over new group life business for Zurich Life as Zurich pulls out of the market.
Existing business will continue to be administered by Zurich Life, but clients will be able to switch to Royal & SunAlliance once the contract comes up for renewal.
Zurich Life offers group life and income protection contracts, while Royal & SunAlliance offers these as well as a group critical illness product. The latter has a 15.9% share of the UK group life and income protection market covering around 8,500 employers and around 1.25m employees. Zurich Life has a 3.7% share of the group life and income protection market.
Mike Warr, director, IFA corporate business at Royal & SunAlliance, said: "We have put in place a fast-track process to ensure a smooth transition to Royal & SunAlliance for Zurich Life's group risk clients. What we are trying to say is that for a piece of business that comes up for renewal, the IFA will not have to start all over again in terms of filling in forms.
"We want to make the process as painless as possible if they choose to continue the business with Royal & SunAlliance.
"We are already well-positioned in this £1bn a year market and this is an ideal fit with our existing portfolio. This market offers excellent potential for continued future growth given the anticipated changes in welfare reform and increasing importance of flexible benefit packages for employees."
The move comes in the wake of Royal & SunAlliance's decision last year to increase its focus on IFAs and exit from tied sales distribution. The company's group life, income protection and critical illness new business grew by 45% between 1997 and 1999 to £34m from £23.4m.
Total premium income for the group in these markets was £148.9m in 1999.
Warr added: "The corporate market offers exciting opportunities for IFAs and this deal reinforces our commitment to the market, which advises on 99% of group risk business.
"This deal will enable Royal & SunAlliance to work closer with IFAs by increasing our future e-business capability in targeting small businesses, a segment expected to grow significantly over the next 10 years."
