Endowment crisis fells two firms

The worsening mortgage endowments crisis appears to have claimed the scalps of two specialist firms which buy up people's unwanted policies and sell them on to other investors, it emerged yesterday.

Policy Portfolio and Beale Dobie, two of the best-known "traded endowment policy" (Tep) firms, said in a brief statement that they were no longer buying endowment policies and would sell off the stock they have.

The two firms are owned by Anglo-South African banking group Investec. They said the decision followed a review of the future potential of the secondhand endowment market.

In the past, secondhand endowment policies could attract good prices from investors because many of the costs and expenses had already been paid by the previous owners, but as the crisis has deepened Tep firms have become much more choosy about what they buy.

The firms and Investec declined to comment further but it is understood that the intention is that the two companies will be wound up.

"These two companies are not really big business to them," said one industry observer. A total of 30 jobs is being lost across the two firms, with 14 people being retained.

Rival firm PolicyPlus insisted the market was "thriving". PolicyPlus yesterday announced it was accelerating its planned UK expansion as a result of the gap left by the two firms shutting their doors.