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Lincoln may be put on market

  • 01/01/2000
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The future of Lincoln Financial Group is hanging in the balance following the announcement by its U...

The future of Lincoln Financial Group is hanging in the balance following the announcement by its US parent that it could sell off the UK insurance operation.

Following a strategic review of the UK business, Lincoln National Corporation (LNC) is considering a range of options including selling up.

As part of its strategy, the parent company is also strengthening its reserves for the settlement of UK pension mis-selling liabilities.

Jon Boscia, president and chief executive officer at LNC said: “Our UK operation has grown into a solid business over the past five years as a result of the efforts of many talented salespeople, managers and employees. However, we have concluded that this market does not fit with our sharpened focus on delivering consistent earnings growth.”

He added: “The pension mis-selling issue has been an industry-wide problem in the UK which has cost the industry billions of dollars and has caused many companies to make significant reserve adjustments.”

Ian Crowder, public relations manager for the UK company said the announcement of intent by its parent was based on the uncertain future of UK earnings in the light of the increased regulatory environment and the pensions review.

“We are surprised by this decision since we have streamlined the company, restructured our salesforce and outsourced our fund management.

“But our parent is concerned about the unpredictable nature of the UK financial services industry.”

He denied that Lincoln’s pensions mis-selling track record was worse than that of other providers. “All companies have got mis-selling portfolios. Ours is no worse than anyone else’s.”

He said that Lincoln would be an attractive buy, should its parent decide on this course.

“We have got a good portfolio. Our Financial Foundations product is a market leader and our new term products are extremely competitive.”

Crowder refused to be drawn on a potential buyer and added: “There are no job losses planned but it is far too early to say.”

Bernard Brown, managing director of Lincoln UK said: “While I am disappointed by the decision of our parent to explore the sale of our company, I am supportive of the corporation’s efforts to reach its strategic goals.”

He added: “I am very optimistic about the future of the business. Our business is being written profitably.

“Whatever the future shape or ownership of Lincoln in the UK we will continue to protect the interests of our clients and focus on building a successful business.”


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