Leap in sales for insurers

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EVIDENCE of a boom in savings and investment mounted yesterday as two of the UK's largest insurers announced a leap in sales in the first three months of the year.

General Accident Life said new business in the first quarter had jumped by 25.5 per cent. That included a boost of 31.7 per cent in the amount of one-off, single premium savings brought in by its sales force.

A leap in sales of single-premium investments saw customers take up pounds 208m of GA's Portfolio Bond, the company's flagship investment. New single premium pensions totalled pounds 118m.

Peter Hales, assistant general manager at GA Life, said: "These are very satisfactory results, well in line with our long-term plans and likely to be ahead of market growth. We continue to achieve substantial growth on a strong and profitable basis."

General Accident, GA Life's parent group, announced on 25 February that it was to merge with Commercial Union, one of its main rivals. The merger is set to be implemented by the end of June.

Commercial Union also reported a sharp boost in new business to its life insurance arm, particularly in one-off sales. Worldwide, customers put premiums worth pounds 981m into CU's coffers, up by 22 per cent from last year.

However, CU failed to match the sales of its merger partner in the UK. Sales of its Premier Investment Bond, which hit pounds 88m last year, plummeted to pounds 49m.

In contrast to GA, CU sees itself as an international company. Of its pounds 789m in new business, pounds 267m came from France.

CU forged a deal in Italy with Banca Popolare di Lodi, one of Italy's largest mutual banks. Single premiums in Italy leapt to pounds 279m, a six-fold increase.

CU's Polish life insurance operation, CU Polska, has also seen new business jump by 25 per cent.

The results will boost confidence in the viability of the deal with GA, where most of the jump in new business came from British customers.

For both companies, the results from life insurance will help to offset a hefty financial blow to their general insurance operations this year. Both have been hit by a high level claims stemming from bad weather in January.

Saloman Smith Barney, the investment bank, yesterday said shares in composite insurers such as GA and CU were now good value following a modest stockmarket correction.