- Strong results for CLI which holds 30% market share of UK international bonds and exceeds £15bn of assets under administration
- Reaffirms commitment to international bond market as part of ‘core business’
- Market outlook: UK market remains strong and future ‘very promising’
Canada Life International (CLI) has reported a strong set of results for 2017 as it continues to cement itself as the provider of choice for international bonds for UK resident clients. CLI, which serves the UK market from its offices in the Isle of Man and Ireland, wrote £1.1bn of new business premium in 2017 and saw its total assets under administration rise to in excess of £15bn.
According to the Association of British Insurers data, CLI held a 30% market share across the 9 months ending 30 September 2017.
Commenting on the results, Sean Christian CLI’s MD and Executive Director for Canada Life’s International businesses, said, “Our continued growth in 2017 and these exceptional results are an outcome of the strategy we set for our business in 2016. Over the last 18 months we have redesigned our entire business with the customer in mind. Putting the customer at the heart of everything we do has seen a reduction in processing cycle times, improved quality and reductions in rework. In turn this has allowed us to redirect resource into activities that add real value to the customer.”
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 CLI to remove some product duplication and simplify its proposition.
“These enhancements have been well received by the market. 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.”
Consolidation and competition
“Our market has continued to see provider consolidation which no doubt has distracted some of our competitors. There has been a recent trend of closed book market consolidators buying up international life company books of business. The ownership structures and less well known brands of these 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. We should not forget that advisers are typically placing their largest and most important clients into international bonds.
Advisers are increasingly feeding back 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.
“CLI has now served the UK international bond market for 31 years and a major advantage we have is our relationship with our parent company. Great West Lifeco is one of Canada’s largest insurance companies and advisers can be confident that when placing business with CLI they are doing so in the knowledge that its parent is committed to its presence in the UK market. Unlike many other companies who have concluded their international operation is non-core, CLI is central to Canada Life’s UK’s strategy . The wider Canada Life business is leveraging the long- standing adviser relationships its international business has formed over the last 31 years in order to penetrate the UK retail advisory market with its onshore product range. ”
Through Great West Lifeco’s support in 2013 CLI was able to acquire Legal & General International in Ireland, demonstrating the group’s commitment to the UK market and a desire to grow its international business.
Commenting on the outlook for international bonds in the UK market, Christian said, “The future of the UK market is very positive. The increased spotlight by tax authorities and regulators to ensure advisers and clients are only accessing tax compliant products has further increased the attractiveness of international bonds as a mainstream tax and estate planning solution for UK residents. Add to that the increasing number of individuals being caught by the IHT net, we see significant growth opportunities in the UK market. We believe that those companies with strong support from their parent company, that have a long track record of commitment their chosen market, that offer a choice of jurisdictions and a full range of solutions, are best placed to maximise the future growth opportunities. Others will undoubtedly remain targets for further market consolidation.”