Allied Dunbar was a large British insurance company. In its early years as Hambro Life Assurance it was listed on the London Stock Exchange and was once a constituent of the FTSE 100 Index. However it was acquired by the Zurich Financial Services in 1998.
History
The Company was founded by Lord Joffe, Sir Sydney Lipworth and Sir Mark Weinberg who set up its headquarters in Swindon town centre in 1970 under the name 'Hambro Life Assurance'.[1] It was first listed on the London Stock Exchange in 1975.[1]The company expanded its financial adviser operations during the late 70's and early 80's to become 'Allied Hambro' in 1984, finally changing to 'Allied Dunbar' in 1985 when it purchased purchased Dunbar & Co., a small private bank, and following the acquisition by BAT Industries.[2] It was bought out by Zurich Financial Services in 1998[2] and its direct sales force became the Zurich Advice Network (ZAN) in 2001.[2]
In 2005 and following changes in industry regulation ZAN evolved into a stand-alone limited entity known as Openwork - a directly authorised multi-tied financial distribution network.[2]
Endowment complaints
Over the period May 2001 to April 2003, a portion of the nearly 300,000 Allied Dunbar customers who had been sold endowment mortgages made complaints. These complaints were prompted by a fall in the market (which meant that nearly nine in ten of their accounts were likely to suffer maturity value and mortgage repayment shortfalls) as well as new regulations which required that customers be notified semi-annually of the projected earnings of the endowment, with particular regard to such shortfalls.[3] Around 1,000 such complaints were rejected during the above period. The Financial Services Authority investigated the rejected complaints, as well as Allied Dunbar's internal procedures for handling such customer complaints, and while maintaining a majority of them, it fined the company £725,000 on 11 March 2004 for mishandling such complaints.[4] In its decision, the Financial Services Authority noted that:[5]
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...complaint handlers had conducted poor quality investigations and there was a failure to gather sufficient evidence to make a fair assessment of both the consumer's attitude to the risk and the suitability of the sale. |
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Allied Dunbar stopped writing endowment mortgages in November 2001.[6] It was not the only company fined by the FSA, and at the time this was only the fifth largest fine for offences related to endowment complaint mismanagement. Friends Provident had been fined £625,000 in November 2003, and five other firms had previously been fined a total of £5.2 million for their mismanagement of such complaints. The largest fine fell to Royal Scottish Assurance, which incurred a £2m penalty.[3]
References
- ^ a b Profile: Sir Mark Weinberg Management Today, 1 February 1993
- ^ a b c d Openwork: History
- ^ a b Dunbar fined £725,000 for mis-selling endowments, The Independent (20 March 2004)
- ^ Final notice of financial penalty, Financial Services Authority (18 March 2004)
- ^ Allied Dunbar fined 725,000 for mishandling mortgage endowment complaints, Financial Services Authority (19 March 2004)
- ^ Allied Dunbar improves customer complaints procedures following FSA investigation, Allied Dunbar (19 March 2004)
