It's sa good time to be a life assurer. An improving economic backdrop will reduce pressure on consumers and, as rating agency Moody's points out, that will "free up expenditure on discretionary items such as life insurance". Better economic conditions are also likely to drive tighter monetary policy and the prospect of gradually increasing interest rates is good news, too. Specifically, it cuts "the risk of yields falling below the levels of policyholders' guarantees," notes Moody's. And an improving equity market backdrop will help support life assurers' investment portfolios. And St James's Place (STJ) looks especially well-placed to benefit, leaving its shares too modestly rated compared with peers.
- New business sales growing fast
- Wealthy customer base
- Impressive distribution network
- Lloyds share disposal ends uncertainty
- Nothing special about dividend yield
- Pensions business sales under pressure
St James's Place is focused on a wealthier segment of the UK life and pensions market than is usually the case at its life assurance peers - average holdings per customer, for example, stand at £104,000. Moreover, its distribution network - the St James's Place Partnership - is a unique asset within the life sector. The partnership comprises well-qualified but self-employed independent financial advisers (IFAs), and they're able to offer a more personalised service than is usually available from the sales staff of more conventional life assurers.