ABI revises life and pensions classification system
by Gill Montia
The Association of British Insurers (ABI) has published important changes to its classification system for life and pension funds.
The system comprises sectors that allow investors and advisers to make like-for-like comparisons of unit-linked life and pension funds, based on the asset allocation of a fund.
The ABI has undertaken an extensive review of its existing sectors, which cover over 6,000 unit-linked life and pension funds.
According to Jeremy Thatcher, Chairman of the Association’s Investment Classification Committee, “The new ABI Sectors reflect a number of major changes to the life and pensions industry. This includes the continued growth in unit-linked business, increasing demand for open architecture ‘wraps’ and multi-manager investing, and major inflows into property as an asset class”.
The sectors are an important tool for fund comparison and the improvements are aimed at ensuring that they reflect the current market, as well as future developments.
The key changes include: new criteria for mixed asset fund sectors, including labels to highlight the equity exposure of managed fund sectors; three new fixed interest fund sectors; new sectors to reflect the growing number and diversity of property funds; the introduction of a flagging system to allow greater detail on sector sub-groupings, such as regional.
The changes follows consultations with insurers, fund managers and advisers, as well as regulatory and consumer organisations.
They will take effect on 25 January 2008 and full details are available on the ABI website.