Canada Life  

Canada Life International confirms commitment to UK

Canada Life International confirms commitment to UK

Canada Life International (CLI) has no intention to leave the UK market, the company confirmed, after posting new inflows of £1.1bn.

The Canadian life company, which claimed to hold a 30 per cent market share of UK international bonds, said it considered the international market to be "part of its core business".

There has been a recent trend of closed book market consolidators buying up international life company books of business. 

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Last February Reliance Mutual Insurance Society announced it was to be demutualised and its assets sold to the Life Company Consolidation Group, a specialist life insurer backed by private equity capital.

A few months previously Charles Taylor agreed to buy Allied Dunbar International Fund Managers Limited in what marked its fifth life insurance acquisition in five years following the purchase of Scottish Widows International in 2015.

CLI, which is owned by Great West Lifeco, acquired Legal & General International in 2013.

Sean Christian, managing director of Canada Life International, said: "Our market has continued to see provider consolidation, which no doubt has distracted some of our competitors.

"Advisers are increasingly feeding back to us that future security is of paramount importance to them and their clients.

"Advisers can be confident that when placing business with Canada Life International they are doing so in the knowledge that its parent is committed to its presence in the UK market."

Canada Life International provides international bonds in the UK from its base on the Isle of Man and Ireland.

The provider saw £1.1bn of new business premium in 2017 and now holds £15bn of assets under administration.

Mr Christian thought many of the recent deals among rivals did not deliver good outcomes for advisers dealing with those businesses.

He said: "The ownership structures and less well known brands of these companies can be an issue for adviser firms in our market. Private equity ownership models do not naturally fit the due diligence processes of many adviser firms."

Mr Christian's outlook on the future of the UK international bonds market was positive.

He said an increased spotlight by tax authorities and regulators on tax compliant products had increased the attractiveness of international bonds as a mainstream tax and estate planning solution. 

"Add to that the increasing number of individuals being caught by the inheritance tax net, we see significant growth opportunities in the UK market," he said.

Mr Christian said Canada Life International's results showed the firm's 2016 business strategy had paid off.

The firm had made some product enhancements and launched a capital redemption option on the Premiere Account through both the Isle of Man and Ireland at the end of 2016. 

Mr Christian said: "This addressed what we see as a potential growth area in the market, most notably via Ireland, and we have been extremely pleased with the level of sales it has delivered in 2017 – twice the volume we planned for the first full year."