April 22, 2013 3:17 am

Wesleyan benefits from recession

Wesleyan Assurance Society, a specialist financial services company used by doctors and other professionals, has emerged as one of the beneficiaries of the recession.

Amid growing worries about the impact of government reforms on pensions and other benefits, the company has reported a big jump in savings by professionals. New business sales were up 13 per cent last year, and have grown 74 per cent since the financial crisis.

The Birmingham-based mutual, which has focused on professionals market after merging with the Exeter-based Medical Sickness Society in 1997, has seen total turnover or premium income rise 133 per cent since 2005 from £166m to £387m.

The growth has been driven by the trust the mutual has built up at a time when banks and other financial services companies have been under fire.

The company, which in the last year increased its staff numbers by 11 per cent, represents about 60 per cent of UK doctors, and tailors its products to the different needs of hospital doctors, GPs, and dentists.

For doctors, a key issue has been the change in the lifetime allowance, which has seen many opt to leave the NHS pension scheme rather than incur a higher a tax bill.

The mutual also works with lawyers and with the NASUWT, the UK’s largest teaching union which represents 260,000 teachers. The changes to public sector pensions have seen increased numbers of teachers opting to take early retirement with lump sums to invest.

Craig Errington, chief executive, says the professions are not immune from the financial crisis, but their relative wealth means they have more choice in how they plan their investments.

“Our observation is that people are saving more of their income than spending it because of their concerns about the future.”

The mutual increased its assets under management last year by 8.3 per cent to £5.2bn. Its main with-profits endowment product achieved returns last year of 11.1 per cent, and has achieved a 135 per cent return over ten years.

It has outperformed the average investment fund by 38 per cent over that period.

“Being outside London in the provinces does have some advantages. It means we have avoided the herd mentality, like with the dotcom bubble. But it probably meant for a year or two we had results that were not quite as good as others,” says Mr Errington

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