The company bucked the downward trend by concentrating on the sale of health and life policies, and is planning to expand its 2,200 sales force through recruitment and acquisition in 1995.
"The industry is suffering a turbulent period at the moment and many companies are leaving the market, but we see a golden period approaching," Sandy Leitch, chief executive of Allied Dunbar, said.
The group has £13.9bn under management for more than a million clients. It paid out £436m in protection and retirement claims and the total premium income increased by 4 per cent to £1.77bn.
Mr Leitch said that, although the market for Allied Dunbar's products had shrunk by 7 per cent in the short term, government policies were placing more financial responsibility on individuals and, in a country where the population seemed under-insured and lacking basic pension provisions, the demand for the company's services was set to increase.
At the same time many businesses were leaving the market, up to 40 per cent in the long-term, because of the demands of new disclosure regulations enforced earlier this year, recent publicity surrounding the poor performance of endowment policies, and falling consumer confidence connected with transfer of pensions.
Yesterday's results were achieved less through product innovation and more through the hard work and expertise of the sales force, Mr Leitch said. Productivity had risen by 5 per cent and the company had recruited 800 salesmen, including 500 from Hill Samuel.
"Allied Dunbar's figures show that, although the industry has hit a trouble spot, if you are a well run company you can continue to make good earnings," Roman Cizdyn, analyst at Smith New Court, said.
Observers were reminded of the general gloom surrounding the industry yesterday when Commercial Union announced that new business in the life and pensions sectors was down 15 per cent to £53.8m. Total new single premium life and pensions business fell from £293.3m to £250.1m. Worldwide new life and pensions premiums amounted to £1.4bn, compared with £1.1bn in 1993.
"CU's results show the cloud still hangs dark and heavy over the UK pension and insurance markets," Steve Bird, analyst at Smith New Court, said.
Commercial Union's overall group results were helped by the strong performance of Group Victoire, the recently acquired French subsidiary.Reuse content