Zurich says now is time for providers to differentiate

Zurich says now is time for providers to differentiate

Zurich’s chief executive has called this April’s at-retirement reforms a crucial time where pension providers can differentiate themselves, as his firm reports a 6 per cent year-on-year increase in business operating profit to £115m at the end of 2014.

The group’s full year results, published today (12 February) also showed new business worth £125m, an increase of 17 per cent on 2013.

Gary Shaughnessy, chief executive of Zurich’s UK Life, said the company was gearing up for the liberalisation of the retirement market, working hard to be ready to support customers, advisers and employee benefit consultants.

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“These reforms give providers huge potential to differentiate themselves and we are excited about the opportunities to give people more choice.”

He noted that while there was momentum behind all areas of the business, the economic environment remains challenging, with yields continuing to fall with low interest rates.

Zurich’s new business margin of 13.6 per cent was lower compared to prior year by 2.8 points, although the firm noted that this reflects a diverse mix of business, with an increase in lower-margin corporate savings and retail platform business in 2014 compared with 2013.

Mr Shaughnessy’s comments come in contrast to those of Phil Loney, chief executive of Royal London, who said that while he was fully supportive of the policy objective of the new pension reforms, “customers are not ready for the new pension freedoms, which have been thrown into place in an entirely unrealistic timescale”.

He said: “I fear that many will make the wrong, often irrecoverable decisions about their retirement and this will result in some very poor outcomes.

“The simple fact is that many people, perhaps most, have not engaged with pension freedom and lack the basic financial knowledge to take the next steps.”