Provider calls it a day after managing less than 1% share of protection business
By Lucy Quinton
Standard Life has severed its ties with the UK protection market after poor overall sales failed to pick up.
The provider will stop accepting new business from 5 December and it will only continue to service existing customers after that date. Standard Life blamed the move on fierce market conditions.
Paul Keeble, PR manager at Standard Life, said: "The UK protection market continues to be fiercely price competitive and our current proposition is sub-scale, representing less than 1% of total sales."
He added that it was a waiting game as to whether it would ever re-enter the market. He said it would "only consider re-entering if we are confident we can deliver both long-term shareholder value and a proposition the market wants".
Up to 50 staff risk being made redundant but the provider said it was hoping to redeploy as many as possible into other areas of the business.
Kevin Carr, head of protection strategy at LifeSearch, said: "It's a shame that such a well known brand has left the market, but it isn't a surprise. They averaged under 1% of our business and although they tried to break the dominance of the major players, at the end of the day they simply weren't competitive or comprehensive enough."
Standard Life has spent the last six months trying to acquire Resolution. However, at the end of last month, Resolution withdrew its support of the potential merger after Pearl submitted a higher offer. Keeble denied that the pullout had anything to do with its rejected offer for Resolution. However, Alan Lakey, principal of Highclere Financial Services, said: "Given that it wanted to merge with Resolution and would therefore have purchased Scottish Provident and Scottish Mutual, it has completely re-thought its future corporate strategy."
The pending Pearl and Resolution deal could cast doubt over Bright Grey's future after it was announced the deal would mean that Scottish Provident would be bought by Royal London, the owner of Bright Grey.
Alison Turner-Holmes, head of marketing, UK new business at Scottish Provident, said anything mentioned in the market at the moment was just assumption. "The Scottish Provident brand is strong, which gives it legs but both Scottish Provident and Bright Grey have good market share. It will be an interesting fit," she added.
However, Carr said that no one would be surprised if the Bright Grey and Scottish Provident brands eventually merged under the name Royal London, saying: "If they competed with each other it wouldn't necessarily be a bad thing as competition in the market is healthy."
