UK provider closes office to all new individual business
Swiss Life UK's days could be numbered following its decision to close to new individual business with immediate effect.
Swiss Life Group is reviewing the future of the UK arm's group business in mid-August, but if no acceptable solution can be found it will also close.
The decision, which has stunned many in the protection market, follows the specialist provider's announcement last September that it was seeking a new parent. It seems none of the prospective buyers ' which remain confidential ' have bid a satisfactory price.
The decision to sell the UK business was based on the Group's strategic review to focus on its European-based life and pensions businesses. No other part of the Group, apart from the UK arm, sells protection.
The UK business is thought to be a profitable arm of the Group, baffling market commentators who were confident a buyer would be found. Last year was a record year for sales, with £53m written in new premium income, an increase of 24% on 2001.
Kevin Carr, technical adviser at LifeSearch, speculated that shutting the individual business could be a tactical move to find a buyer even at this late stage. 'Some people in the market think this action could be to force the hand of a potential buyer. I wouldn't rule out Swiss Life finding a suitable buyer yet. We are gutted at the news, as Swiss Life is certainly a preferred provider for critical illness and income protection. It has great products and service and will be missed by IFAs,' he said.
If the group business is closed, Carr said there would be no going back. 'The individual business can be switched on as quickly as it is switched off. But group business is different. It often takes a long time to win back group clients.'
The closure of the individual business does not affect the rights of existing policyholders.
According to Brian Hurd, managing director of Swiss Life UK, closing the individual business could lead to 200 redundancies. 'This is a disappointing outcome for Swiss Life UK, but we accept the decision of our Swiss parent to focus on its new corporate strategy.'
