lux insurer baloise enters uk offshore bond market

Simon Crampton, a Briton who has been based in Luxembourg for the past 11 years, is heading up the operation as UK relationship manager, and has just relocated to London to oversee the roll-out.

He unveiled the company’s plans during an International Adviser offshore bond workshop in London.

Baloise’s product,the ProFolio International Investment Bond, “complements” the company’s existing ProFolio international range, which is currently available in 15 countries, including France, Spain, Italy, Portugal, Malta, Finland and Sweden, Crampton said.

The launch by Baloise (to pronounce, think “Gauloise”) comes at a time when the UK market for offshore bonds has been contracting. New business sales of single- and regular-premium products last year came in a fifth below 2011’s total, which in turn was down more than 7% from the previous year, according to the Association of British Insurers, which collects data from its UK-based member companies.

However, Crampton – who joined Baloise in September, from the Luxembourg arm of AGR2 La Mondiale – said the company is confident that there is a place in the market for the Baloise bonds.

“We are already seeing a demand from internationally-based advisers, who are looking for a UK-compliant product,” Crampton said.

He noted that the company enjoyed an advantage in arriving in the market after the Retail Distribution Review (RDR) had already come into effect, since this has meant the company has avoided the time- and money-consuming business of having to change its products and sales materials to comply with its requirements.

But at least as important, he added, is that the UK-compliant Baloise ProFolio product works in all the other countries in which the company already has a ProFolio offering. “With Baloise, UK advisers and banks are able to have a one-stop-shop for their internationally mobile client base, minimising the need to contact various providers in the relevant jurisdictions to find suitable solutions,” Crampton said.

This is because Baloise, in its corporate form, already possesses “the relevant know-how” with respect to these markets’ tax rules, given its established presence in them, “thus ensuring any international moves can be prepared for appropriately and tax-efficiently”, he added.

Non-UK insurers un-dissuaded

Baloise’s approach is similar to that of some other Europe-based insurance companies that have ignored the decline in offshore bond sales by their UK-based rivals, and have instead been actively and expensively targeting the British market.

Last year, for example, Generali, the Trieste-based insurance giant, entered the UK market with a product aimed at ultra high net worth individuals, via its Dublin-based PanEurope arm, while AGR2 La Mondiale launched into the UK about five years ago.

All three companies are understood to be attracted by the size and sophistication of the UK’s high net worth market, and the fact that it is unusually mobile: that is, Britons typically relocate to various countries in Europe and Asia in which these Europe-based insurance companies are already well established or, in the case of Asia, are working hard to build a presence.