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UK life insurance sector "should be successful"

Date: Wed, 14 Jan 04 Analysis

LONDON, UK - A recently published report has claimed that the UK life insurance industry could benefit from the ongoing attempts to define contribution pension schemes.

The ongoing switch of occupational pensions schemes away from defined benefit could provide a “significant growth engine' for UK life insurance companies, according to Moody's investor services.

The report suggested that UK corporates were increasingly willing to close old defined benefit schemes, transferring administration and risk management to third parties, as a consequence of accounting changes and equity market volatility.

“The insurance industry, with its vast experience of administering and pricing pensioner risks, should be able to play a major role in either the administration and/or financing of such business,' the report said.

In a report on the sector, the rating agency Mellon Financial Corp.'s Human Resources & Investor Solutions Group, said: “Fundamentally, Moody's regards the UK life insurance industry as a sector which should be successful.'

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