Insurer's new business soars by 55%: Sun Life and Equitable produce the best results in the sector to date

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The Independent Online
SUN LIFE, the life insurer 50 per cent owned by Donald Gordon's Transatlantic Holdings, took more than pounds 2.3bn in new premiums last year, a 55 per cent increase on 1993.

Shares in Transatlantic climbed 18p to 438p yesterday on the back of what Sun Life described as 'excellent results'.

Equitable Life, the mutually owned insurer, announced it had increased its annual premium income by 10 per cent to pounds 323m, which it believes to be a record for the life insurance industry. Equitable also sold pounds 1.1bn of single premiums, a 17 per cent increase on the previous year.

The results from Sun Life and Equitable are the best so far from the established life insurers. Most suffered falls in sales of regular premium business last year.

The bulk of the money Sun Life received was as lump sum investments - that is, as single premiums. The continuing popularity of its distribution and deferred distribution funds helped to boost life single premiums to nearly pounds 1.6bn. Total single premium business rose by 57 per cent to pounds 2.2bn.

Sun Life also made progress with sales of the more profitable regular premium contracts. Regular premium sales increased by a quarter to pounds 106.7m, with particularly strong growth of personal pensions business.

On the familiar industry index that adds one-tenth of single premium sales to new regular premiums, Sun Life's new business grew by 45 per cent to pounds 329.9m. On the same basis Equitable achieved sales of pounds 431.7m.

John Reeve, Sun Life's managing director, said: 'It is only two years ago that I was able to announce new single premium business exceeding pounds 1,000m for the first time in Sun Life's history. This year we have exceeded pounds 2,000m.'

Equitable's sales of regular premium contracts exceed those of Prudential Corporation and Standard Life, the two largest companies in the industry. Equitable's emphasis on low costs and its emphasis on not paying commission make it very popular with professionals seeking pension contracts.

Equitable said its expense ratio had fallen to 5.8 per cent, 'lower than the society's expense ratio in the 1890s'. It added: 'This has occurred despite the enormous increase in the complexity of the business and the escalating cost of accommodating the requirements of the regulators.'