His comments follow the recent sale of Standard Life Aberdeen’s UK, German and Irish operations to consolidator Phoenix Group – a move that will see the firm exit the insurance business.
Phoenix, which has been described as the real winner of the deal, will still provide and administer the Standard Life international bond, which will retain its name and the support of the existing team that will move to Phoenix.
Standard Life will continue to promote it to advisers.
Despite this level of consistency for customers and IFAs, who a Standard Life spokesperson told International Adviser will hardly notice the difference, Christian has his reservations.
“The ownership structures and less well-known brands of these [consolidator] 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.”
Christian said that it was important for the industry to remember that “advisers are typically placing their largest and most important clients into international bonds”.
“Advisers are increasingly feedback to us that future security is of paramount importance to them and their clients – it’s not easy for them to explain to their clients why their bond is now provided by a company that has less history in the market and is less well-known compared to the company they originally bought their bond from,” he said.
Market share growth
His comments come as Canada Life International announced a strong set of results for 2017, which the company said shows, “it continues to cement itself as the provider of choice for international bonds for UK resident clients”.
Christian attributed some of this success to the market consolidation, which “no doubt has distracted some of our competitors”.
The firm, which serves the UK market from its offices in the Isle of Man and Ireland, wrote £1.1bn ($1.5bn, €1.25bn) of new business premium in 2017 and saw its total assets under administration surpass £15bn.
According to data from the Association of British Insurers (ABI), Canada Life International held a 30% market share across the nine months ending 30 September 2017.
This compares with a market share of 28% in 1Q17 and 25% in 4Q16.
Christian attributed the growth to the strategy Canada Life International set out in 2016. “Over the last 18 months we have redesigned our entire business with the customer in mind.”
After reviewing its product range last year, the business made a number of enhancements to its Premiere Account product, including increasing the maximum number of policy segments from 998 to 99,999 to provide customers with greater flexibility when considering tax planning.
The enhancements enabled Canada Life to remove some product duplication and simplify its proposition, the firm said.
“These enhancements have been well received by the market,” Christian said. “In addition to product enhancements we also launched a Capital Redemption option on Premiere through both the Isle of Man and Ireland at the end of 2016.
“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.”