Scottish Life growth helps sustain workforce security
0 Comments | Herald, The; Glasgow (UK), Jul 29, 2010 | by SIMON BAIN
ROYAL London, the UK’s biggest surviving mutual insurer, says record business levels at Scottish Life have helped it sustain its 1650-strong workforce in Scotland over the past two difficult years.
The group, which employs 1350 people directly in Edinburgh and Glasgow, and supports a further 300 jobs in outsourcing group Capita, yesterday reported a 62% jump in new life and pensions business to pound(s)1.13 billion at Scottish Life.
Overall the rise in new business was 35% across Essex-based Royal London, which also runs its Bright Grey and Scottish Provident protection businesses in Scotland.
“We have stayed stable,” said director John Deane. “We have been able to provide stability as a result of the business advancing.” He said a new “positive” outlook from ratings agency S&P reflected the advance.
The resilience contrasts with weakness at Dutch-owned Aegon UK, which last month said it would have to shed 25% of its staff including 600 at its Edinburgh headquarters due to poor profitability – it cited a 2.7% return on capital.
Aegon, along with Aviva and Scottish Widows, have persevered with paying high commissions to win business in the competitive group pensions market, a practice abandoned by rivals, frowned on by the regulator, and publicly criticised by both Royal London and Friends Provident.
Deane, who heads Royal London’s intermediary (IFA-linked) businesses, commented: “I still think there are distortions in the market with regard to commission. The FSA is clearly taking greater interest and that is beginning to modify behaviour, but we are at the beginning rather than the end of that.”
He said the Government’s commitment to go ahead with the retail distribution review, the industry shake-up that will outlaw direct commission payments, would usher in greater transparency. It was, however, clear that consumers would not necessarily have to pay fees for advice, but could have an agreed fee deducted from the value of their product – a model operated by Scottish Life for the past few years
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