Hibernian Group, the Irish insurer, bucked the dismal trend in life product sales with an increase in profits for the first six months of 1995 on the back of pension sales and higher levels of investment income.
Pre-tax profit rose 14 per cent to pounds 13.84 compared with pounds 12.11m in 1994 after unrealised gains of pounds 5.09m compared with losses pounds 15.4m in 1994. Healthy international bond and equity markets helped net the group a further pounds 5.81m, compared with a loss of pounds 18.41m in 1994 bringing in a combined pre-tax profit of pounds 19.65m.
The company's new pension product, which allows customers to spread their investments across a panel of independent fund managers, pushed pension sales up by 47 per cent. Operating profit rose by 27 per cent to Irpounds 2.89m. But the contraction in the life market led to a 20 per cent downturn in new business sales to Irpounds 2.41m.
The chief executive, Adrian Daly, said the group was operating in "extremely competitive" marketplaces in both Ireland and the UK.
"We envisage this level of competition being a feature of our marketplaces for the foreseeable future," he said.
However, given the continued focus on quality underwriting and cost containment, present trends indicate growth in operating earnings through the remainder of the year, he said.
Competition in the motor insurance market hit both Irish and UK general underwriting results.
The Irish arm reported a modest rise of 1.7 per cent to Irpounds 88.3m while operating profit increased 15 per cent to Irpounds 10.5m.
In the UK, where motor insurance accounts for just under 50 per cent of business, the group reported a loss of pounds 536,000 on gross written premiums of pounds 16.41m, compared with a profit of pounds 404,000 at the interim stage last year.
International reinsurance business, buoyed by a strong underwriting performance, produced a profit of Irpounds 1.148m. The improvement led to a 12 per cent increase in the interim dividend to Ir2.8p, while earnings per share rose to 23.8p.