Lloyds Banking Group to cut protection sales

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Lloyds Banking Group is cutting its standalone protection advice service available via its bank branches due to a 'lack of demand.'

Lloyds confirmed it would no longer offer customers access to protection advice through Halifax, Lloyds or Bank of Scotland branches.

However, the banking group will still offer protection policies as part of mortgage sales. 

As part of the changes some 1,250 staff members are at risk of redundancy.

Johnny Timpson, financial protection specialist and planning manager at Scottish Widows, which had offered direct protection sales as part of the Lloyds Banking Group, said the move was a bid to change interaction with customers based on changing needs.

He said: "At the moment the majority of our customers are buying protection policies through the mortgage. We have mortgage advisers who make protection and general insurance recommendations.

"We also have advisers who are doing the non-mortgage piece, we made the decision that protection distribution in the branch network will only be with a mortgage. With a customer who has a non-mortgage need, we're going to be directing them to the Money Advice Service so they can review their needs from there or if they want to speak to Scottish Widows direct. 

"This comes back to the strategic statement announced and a big move towards digital. The number of consumers coming to branches has significantly reduced, we have people coming to us using their mobile, tablet and so on. In the old days people would come in, this isn't happening anymore. At some point we will launch a digital protection offering but in the meantime customers with non-mortgage needs will be referred to MAS and financial advisers. The customer is redefining how they want to engage."

Scottish Widows is relaunching its protection proposition into the intermediary market - expected in 2015. 

Earlier in the year Lloyds Banking Group had announced it plans to reduce its workforce by a further 9,000 over the next 3 years and close an estimated 150 branches from the combined networks of the Lloyds, Halifax and Bank of Scotland brands.

The bank said in a statement: "Lloyds Banking Group is committed to working through these changes with employees in a careful and sensitive way.

"The group's policy is always to use natural turnover and to redeploy people wherever possible to retain their expertise and knowledge within the group.

"Where it is necessary for employees to leave the company, it will look to achieve this by offering voluntary redundancy. Compulsory redundancies will always be a last resort."

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