Scot Wids to re-enter IFA annuity market; Exits offshore bonds

Scottish Widows will begin selling annuities via IFAs in a new distribution strategy as it closes Clerical Medical International to new business.

The move is part of a review of the business which also includes researching an entry strategy for the IFA protection market.

Scottish Widows is one of the country's largest providers of protection products, but it sells them exclusively through its parent company, Lloyds Banking Group.

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

A spokesperson for Widows said it would be maintaining its presence in the Isle of Man, where CMI is based, and added it is contacting customers to reassure them there will be no changes to their policies or service levels.

There are no current plans to sell CMI, the spokesperson confirmed.

Toby Strauss, group director of insurance at Widow's parent company, Lloyds Banking Group, said: "The IFA market is a core channel for us and we will be working closely with IFAs to ensure we not only create 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.

"The introduction of the retail distribution review (RDR) 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 during what will be a demanding time of change.

"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.

"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."