And in response to the news that Singapore is to go down a UK-style RDR route, Van Der Wielen said “RDR certainly does not frighten me” and that having a large scale business in the UK and a 24-year presence already in Hong Kong put Friends Provident in a great position to make inroads into Asian markets.
He said that the strategic review he implemented when he joined Friends Life was well advanced and that he had strengthened the management team.
An announcement on the new position as executive director for Asia with responsibility for business in Asia and the Middle East was imminent. He said: “We’ve been inundated with people who applied,” adding that “you don’t want to manage all the Asian business from behind a desk in the UK.”
By region, the highest new business volumes were in North Asia, £103m annual premium equivalent in 2011, and the Middle East, £46m, in contrast to the UK’s £18m. The roll-out of a new regular-premium product, Premier, is planned to launch in Singapore and the Middle East in the second quarter of 2012 and in Hong Kong in the final quarter of this year.
He said that “internationally there is a fair share of challenges” and that the Friends Life Group businesses represented overseas were a diverse collection, an important part of the total picture producing 50% of the value of the group’s new business.
On the plus side he highlighted the tax and investment planning business Lombard, based in Luxembourg and 20 years old, as having achieved an impressive growth trajectory, currently very European focused, “with far more potential to grow into Asia.”
Lombard’s life assurance business aims estate planning solutions at HNWIs and high end IFAs across Europe and to a lesser extent in Latin America and Asia.
He said Lombard’s market share had grown from 16% to 19% year-on-year and that there were net fund inflows.
But the international segment of the business comprising five areas listed below, disappointed with a more than halving of pre-tax IFRS operating profit from 2010 to 2011, down from £95m to £40m.
- Isle of Man based Friends Provident International
- Overseas Life Assurance Business (OLAB) which is the overseas branch of Friends Life
- Financial Partners Business, a German distributor of OLAB unit linked pensions business
- A 30% stake in AmLife Insurance Berhad, a Malaysian life insurance company
- A 30% stake in AmFamily Yaka Berhad, established in December 2011 as a Malaysian family takaful business.
Van Der Wielen identified a number of adverse one-off items and challenging market conditions in Europe as key reasons for the poor international results. In particular in Germany the poor figures for guaranteed products had “a major impact.”
Overall, Friends Life reported a pre-tax IFRS operating profit of £722m in 2011, up 149% from £290m in 2010.
Note: this article was amended on 28 March, 2012.
