Friends Provident is to start selling protection products through Tesco Personal Finance and secure more distribution opportunities with financial advisers too, as it ramps up its distribution capabilities.
Full details of the Tesco deal were still to emerge as Health Insurance went to press but Friends Provident chief executive Trevor Matthews hailed it as a “very exciting development” that should help the insurer to cope during “tough” trading conditions.
Tesco Personal Finance currently sells life insurance provided by Direct Line. Existing customers will continue to be underwritten by Direct Line, but once the new deal is in place all new protection business will be handled by Friends Provident. Tesco will continue to sell dental and Health Insurance provided by AXA PPP healthcare.
The plans were unveiled as the insurer released life and pension sales figures for the first quarter of 2009. Although UK individual protection sales strengthened in March with improvements in application counts through the quarter, the figures were 8% down on the fourth quarter 2008, reflecting “challenging” housing market conditions, it said. Individual protection sales were £9.1m (Q4 2008: £9.9m).
Friends Provident said that overall application counts, which it described as “an important lead indicator for sales” were up.
“We are seeing signs of a pick-up from depressed levels in late 2008, with March figures up 17% on February, boosted in particular by key distributors such as estate agency business Countrywide Financial,” it said.
The insurer plans to boost protection business by securing new distribution deals, including ones with advisers. In the first quarter, it signed an agreement that positions it on the Sesame Select protection provider panel, giving access to the 1,600 adviser IFA network operation of Sesame.
“Together with our 28 existing arrangements, these relationships give us a diverse spread of single-and multi-tie distribution partners,” Matthews said. “The agreement in principle with Tesco Personal Finance will significantly broaden our distribution base.”
Group protection sales of £2m (Q4 2008: £1m) showed “a return to more normal levels” from depressed levels in the fourth quarter of 2008, Friends Provident said.