Royal & Sun Alliance has made dramatic changes to its sales channels for protection products, withdrawing from the direct sales and tied agency markets and increasing its presence in the IFA sector.
Members of the direct sales and tied agency force are to join the IFA network at Countrywide Independent Advisers, a subsidiary of Misys.
“We have taken the decision that the right choice for customers, and that, increasingly the customer preference is the IFA. So we decided to withdraw from the direct sales and tied agency market.” said Anthony Annakin-Smith, communications manager.
The company said that it felt the impartiality was increasingly valued by consumers looking to buy protection products.
“IFAs have the ability to secure independent advice and we know that IFAs rate our products, so we are quite prepared to let them decide how much they use us,” said Annakin-Smith.
“At the end of the day, consumers will always choose how they buy. In the protection market, there is a lot of variation in terms, types and price of products, so IFAs are in the best position to secure the best deal for customers.”
Annakin-Smith said he believed that the trend towards the use of IFAs could increase: “A number of companies have withdrawn from the direct sales, so it could spread through the market.”
In terms of PMI, the company confirmed that it is also developing the broker channel, but said it would not be cutting back on the direct sales force. “We have been developing and have expanded our broker base,” said Gerry Callaghan, head of sales and marketing. “We have used broker consultants to achieve that but we’re not making any cuts.”
The company is also developing facilities to assist IFAs. “We are making a significant investment in new technology and the administrative functions that support our IFA channels,” said Stephen Pater, managing director, life and trust operations. “This amounts to a huge vote of confidence in the IFA sector and we are looking forward to continuing to build solid working relationships with IFAs.”
In the first half of 1999, the company’s direct sales force and tied agency channels generated a marginal loss and contributed only 28% of new premium income