Is the deadline requirement for policyholder-specific commission disclosure by 1 January 2019 realistic?
The Isle of Man FSA has been clear about generic key information documents by 1 January 2018, client-specific key information documents with full commission disclosure by 1 January 2019, and we were on-board with that timetable. They signalled their intent fairly early on. We got engaged in that process of consultation and we are happy with the deadlines.
We have to move other stuff to make it happen but as a business we are reasonably well positioned to do it.
Do you anticipate much change to the types of products Old Mutual will offer in coming years?
I don’t think the style of product is going to be fundamentally different going forward. It will still have a lot of the same characteristics it has today. We will predominantly be single premium, certainly non-contractual.
In large part, this is what the regulation is about, both in the Isle of Man and the Middle East, with the proposals coming out of the Insurance Authority. It’s going to drive the industry into a much more transparent design in terms of pricing and charging, so that will be a dominant feature.
Do you think there will be a higher percentage of investment- or insurance-led products in future, for OMI and for the international life industry as a whole?
The industry will be more investment-led. That said, I do think insurance has a real role to play.
We are doing more business in the high net-worth sector and, with the business we transact there, the solution often involves an element of investment, but life as well.
Going forward, the dominant feature will be investment-led products but there will be a complementary role for life products to play as well.
Which geographical markets are most important to OMI?
They are all important, because they all contribute. Unlike some of our competitors, which are single-market companies, we have a much more global footprint. We are in the Middle East, Singapore, Hong Kong, Europe, the UK, South Africa and South America, so we truly have a global business.
It is really about where the wealth is growing in the world, which is typically in the emerging markets of Asia. I am also hearing about Africa. I suspect there is wealth generating there but it is not as much on our radar as Asia.
What is the impact of the surprise 25% overseas pension transfer fee, which will apply in certain circumstances and jurisdictions of the Qrops market?
Like most people in the industry, we weren’t expecting it. As a consequence, we are still doing our own analysis of it. Is it a good news story for our industry? Probably not.
There are people who are undergoing pension transfers that this news will have an impact on and it’s important they get the right advice in order to move forward.
Are you planning any acquisitions this year in the markets where you do business?
Like any kid that comes from a big family, you always have an appetite. We would be receptive to looking at anything that makes sense to us as and when those opportunities come along. But we don’t have an acquisition agenda at the moment.
We assess opportunities as they emerge, and they could be in different spaces.
The vast majority of our business in the markets I mentioned earlier is single premium. We are now beginning to develop our footprint in the high ne worth space.
People often wrestle with what exactly is high net worth. We are seeing a trend of clients of private banks who are at a level of assets that just isn’t cutting it for the private bank in terms of margin, so they are encouraging these clients to go elsewhere. I have witnessed this trend in Europe, the Middle East and Asia.
These clients are going to various independent wealth managers, external asset managers and high net worth advisers, and we are finding this space is a sweet spot at the moment for our business.
These people typically have assets between $1m (£0.8m, €0.9m) and $10m, and the private bankers who are no longer working for the private bank do not have access to products to give to these customers, so this is an area of particular interest for us.
