Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Resolution crashes 10% on insurance policy investigation

2 Comments
Resolution crashes 10% on insurance policy investigation

Resolution tumbled more than 10% in early trading amid a sharp slump in the value of the insurance sector following the announcement of an investigation into historical life and pensions policies.

St James Place was among those hit, sliding 3.07%. Aviva fell 6.1%, L&G dropped 4.37%, Standard Life fell 2.8% and Prudential 1.55%.

The sell-off followed a Daily Telegraph report that the Financial Conduct Authority is to investigate the terms of 30 million insurance policies written between the 1970s and the 2000s.

The investigation, due to begin this summer, will probe the ongoing terms of pensions, endowments, investment bonds and life insurance, historically sold with high commission payments to advisers.

It will focus on the ‘zombie’ funds of closed life business – the area in which Resolution has successfully built an ongoing insurance business through consolidation.

The announcement is the second major hit to the insurance sector in as many weeks, following the liberalisation of pensions annuities announced in the Budget. The FTSE 350 Insurance sector has fallen more than 8% since mid-March, versus a marginal gain by the FTSE 100 over the same period. 

'We want to find out how closed-book products are being serviced by insurance companies, as we are concerned insurers are allocating an unfair amount of overheads to historic funds,' FCA director of supervision Clive Adamson told the Telegraph.

'As firms cut prices and create new products, there is a danger that customers with older contracts are forgotten. We want to ensure they get a fair deal. As part of the review we will collect information to establish whether we need to intervene on exit charges.'

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Wealth Manager Retreat 2017: size isn't everything

Wealth Manager Retreat 2017: size isn't everything

We asked our delegates at the Wealth Manager Retreat what they think about the recent wave of consolidation in the industry.

1 Comment Play CIO Tapes - part 3: 'passive funds are anti-capitalist'

CIO Tapes - part 3: 'passive funds are anti-capitalist'

Citywire recently gathered three of the UK's leading fund investment heads to discuss their hopes, fears and the issues that their jobs throw at them daily.

Play CIO Tapes: do investors have it as good as it gets?

CIO Tapes: do investors have it as good as it gets?

Citywire gathered three of the UK's leading fund investment heads to discuss what they fear and what makes them cheer about the year ahead

Read More
Your Business: Cover Star Club

Profile: Rathbone's Newcastle boss on the road to £1bn

Profile: Rathbone's Newcastle boss on the road to £1bn

Starting from zero assets on day one, Rathbone's Newcastle team now looks after just over £400 million in clients money

Wealth Manager on Twitter