Norwich Union response to today's Sandler announcements

Article date: 15 July 2003

Commenting on the Sandler announcements today from HM Treasuryand the Financial Services Authority (FSA), Peter Hales, sales& marketing director at Norwich Union Life, said:

“Norwich Union was pleased to play an active role in theconsultation process, and we look forward to continuing tocontribute towards the Government’s thinking. The keychallenge is to help close the ‘savings gap’, and asthe UK’s largest insurer, we have the manufacturing anddistribution capability for these products to be a success.However, we need a workable environment that delivers good value tothe consumer, and an economic model that provides for the costs ofdistribution and manufacture.

“In terms of the sales process, the ‘guided selfhelp’ route is in line with our view, and we believe thatthis approach will be supported by the consumer research beingundertaken by the Government. We believe ‘guided selfhelp’ moves towards striking the right balance between havinga more efficient sales process, giving some face to face help tothe consumer and maintaining an acceptable level of consumerprotection.

“On the issue of the charging structure, we re-iteratethat we are against price capping in principle - this distorts andrestricts competition in free market economies. But if a price capis to be set, it must be at a realistic level that generates areasonable return to shareholders. We remain committed to workingwith policy makers to identify an appropriate level and shape forthe new pricing structure.

“We believe the range of products to be included in thenew suite is appropriate, and we particularly welcome the fact thatstakeholder pensions will be folded into the product range.We’re also encouraged by the recognition that with-profitshas an important role to play; the concept of smoothing of returnsis clearly attractive to consumers.

“A key issue moving forward is for the industry tocontinue to strive to improve the quality of information to, andhence understanding by, consumers. We believe that initiatives suchas Raising Standards demonstrate a clear commitment to thisend.”

-ends-

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Notes to editors

  • Norwich Union is the UK’s largest insurer. It is aleading provider of life, pensions and investment products and oneof the leading IFA providers. IFAs provide around 70% of thecompany’s long-term savings business.
  • Norwich Union has strategic alliances with building societiesand other leading UK brand names including Tesco Personal Financeand The Royal Bank of Scotland Group.
  • Norwich Union’s news releases and a selection of imagesare available from Aviva plc's internet press centre atwww.aviva.com/media

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