Speculation is mounting over the future of the Scottish Provident and Pegasus critical illness produ...
Speculation is mounting over the future of the Scottish Provident and Pegasus critical illness products following Abbey National's proposed purchase of the former.
The future of the two products has yet to be confirmed, but should the proposed acquisition go ahead, Abbey National will have two of the leading critical illness providers in the IFA market under its umbrella, with a significant cross-over in products. While both parties offer market leading products, Abbey National is not expected to maintain both brands.
Commenting on the purchase, Rod Macdonald, sales and marketing manager at Permanent Insurance, said: "Early indications suggest that Scottish Mutual, the parent of Pegasus, will have the upper hand. Pegasus is only a small operation but it is big on critical illness. The obvious thing would be for Pegasus to be rolled into Scottish Provident, but it has been stated that Scottish Provident will be subservient to the wishes of Scottish Mutual."
There have also been rumours that two of the top jobs in the new business will be held by Scottish Mutual management rather than by the individuals who built up Scottish Provident's protection business.
Insiders are also suggesting that Abbey National may not have the interests of Scottish Provident at heart, acquiring it to build its business as part of a defensive strategy, so preventing its own acquisition.
Neither Scottish Provident nor Pegasus would be drawn on the future. Roger Edwards, product marketing manager at Scottish Provident, said: "It is far too early to say what will happen to product lines."
But Abbey National maintains that the overlap is not as significant as many in the market are suggesting. Christine McAllister, PR manager for the Abbey National Group, said that the two companies could sit well together. "Both have their strengths, and the combined operation will have a 35%-40% share of the IFA market making it a very good proposition for IFAs."
But Diane Saunders a Leeds-based IFA, is sceptical.
"When companies are bought out the best features are not necessarily maintained," she said.
