Scottish Widows to launch annuity and protection products

Scottish Widows has announced a new intermediary strategy following a comprehensive review of the company’s product offering, which will see it launch new products in the annuity and protection markets and close its offshore bond subsidiary.

The review, commissioned by Toby Strauss, group director for insurance at the Lloyds Banking Group, has focused on how the business can expand within its current core markets of pensions, protection and investments.

Preparation on an entry strategy into the IFA annuity market is already underway, the company said, and the business has also identified significant opportunities in the protection market.

However, as part of the review, the company has decided to withdraw from the offshore bond market by closing Clerical Medical International to new business from 30th March 2012.

Mr Strauss claimed that the IFA market is a “core channel” and it will be working closely with IFAs to ensure it creates a new and enhanced product offering but also deliver these in a way that caters for their needs in what is a rapidly changing market.

Mr Strauss said: “The introduction of the Retail Distribution Review next year will be a major challenge for IFAs, and we want to ensure Scottish Widows remains at the forefront of providing innovative, quality products that help ease the burden.

“We are committed to providing customers with products that reflect their changing needs and with people living longer and rapid growth in demand for annuities we feel this is the right time to signal our move into this market.”

He highlighted that with a protection gap in excess of £2,000bn, there is already a “substantial customer need” for life assurance in the UK.

Mr Strauss said: “Our existing expertise in life assurance through other channels means that we can utilise this to develop a compelling protection offering that will be specifically designed for the IFA market.

“Enhancing our offering to the IFA market while creating new tailored products to sell through Lloyds Banking Group’s other retail business demonstrates our commitment to create better-value products and services for our customers.”

Scottish Widows will be communicating further details of today’s announcement to all of its IFA partners.