Norwich Union Lifeis looking at organic growth for its life operations rather than making a string of acquisitions, the group’s managing director Alan Griffiths has announced.
“We are not ruling out some acquisitions, but most are overpriced at present,” he says.
“We are getting solid growth in the life business, so I don’t see us having to make acquisitions.”
Griffiths joined Norwich nine months ago, having spent a number of years running Colonial’s adviser groups, and has since concentrated on boosting services levels to advisers as a key strategy to build business.
“The initial impression on joining Norwich was the life business was a neutral brand with fantastic products,” he says.
“The problem was distribution was poor.”
The changes put into place at Norwich are already achieving results. The company came first in the Taylor service levels survey and annual premiums are up 88 per cent for the September year end.
Griffiths says single premium business is also up 22 per cent.
“A lot of our competitors have gone for acquisitions to boost their business, but the advisers suffer due to service levels falling,” he says.
“Our challenge has been acknowledging that a mid-sized company cannot be all things to the market.”
Another key part of Norwich’s resurgence is its targeting of the corporate superannuation market. The company launched a product, Super Solutions, aimed at this market a couple of years ago.
“All baby boomers are coming through to retirement and the days of double digit returns for super are gone,” Griffiths says.
“There is going to have to be a range of draw-down products for this market. Historically, life companies, with their conservative approach, have been very good at providing this type of product.”
Griffiths sees the next generation super product as being a mixture of life and unit trusts, with the focus on accumulation.
“People will be looking for ways of getting an income on retirement and this will see a change in the products as people approach that point,” he says.
Norwich has formed alliances to sell its corporate super product, including a joint venture with the CPAs.
The joint venture, operating under the Qantum brand, allows CPA’s to access Norwich’s Super Solutions products to aim at small to medium-sized businesses with their own superannuation funds.
Griffiths says it is about building a relationship between the CPA and the company and then using this as a leverage in the distribution of all Norwich’s products.
“We are building our distribution strength through these business partnerships,” he says.
