Speaking in an interview with The Times newspaper he raised the possibility of bringing back endowment products but in doing so has come in for criticism from consumer groups and rival insurers.
The mortgages, which seek to pay off borrowings through investing in stocks and shares, fell from favour after returns disappointed forecasts and the industry has had to pay hefty compensation for mis-selling.
But Sir Brian Stewart said: “Endowments have worked for a lot of people. They are not all bad news.” He added that endowment policies had generated good investment returns.
“The trouble was with projections made about future returns. Too often they were calculated at times of high inflation and the estimated outcomes were over-optimistic.”
Teresa Fritz, principal researcher at Which?, said: “I’d be very, very surprised if anyone could use the word ‘endowment’ on a product again.”
Mike Kirsch, operations director for Norwich Union’s life business, said: “There are simpler solutions for regular savings available – I can’t see a place in the market for these products.”
Standard Life has also announced its new business results for the first quarter 2005.
Standard Life group chief executive Sandy Crombie admitted that conditions in the housing market have affected mortgage volumes at Standard Life Bank.
He said: “There is more still to do on products and pricing and on changing the business mix but considerable progress has already been made, for example with our SIPP product.
We erred on the side of caution with the launch of our new protection product but we intend to be more competitive as the year progresses. Our plan remains to write less business in the UK than we did in 2004 as we seek out more profitable segments of the market.”
