Prudential gets Abbey habit

Two of the biggest names in the British financial sector unveiled closer ties today after Abbey National struck a distribution agreement with Prudential.

The tie-up, which should come into force next year, will see Prudential’s with-profits Prudence savings bond sold through Abbey National branches.

The deal between Abbey National and Prudential takes advantage of the proposed changes to rules governing the sale of financial products.

Under today’s four-year agreement, Prudential will allocate £750m (€1.2bn) of bonds to Abbey National customers each year.

Mark Wood, head of Prudential UK, said: "The with-profits agreement reflects our strategy of building multi-channel distribution and enables us to focus our capital on areas of the business that give us a competitive advantage."

As part of the tie-up, Prudential will also replace its current protection products with new ones developed for it by Abbey National, including life assurance, critical illness cover and income protection.

The products will be underwritten and administered by a new dedicated business unit within Scottish Provident, Abbey’s specialist protection arm, and sold under the Prudential brand.

The agreement is dependent on the implementation of proposals allowing banks and insurers to sell products from a range of providers.