Stock market-linked business was especially strong. Sales of unit-linked single-premium life business soared to pounds 1.7bn, a 141 per cent increase on the second quarter last year.
However, regular premium business remains stagnant, slipping 1 per cent in the quarter to pounds 475m. In the year to 30 June, new annual business was down by 9 per cent to pounds 1.8bn.
New annual premiums for pensions rose 9 per cent to pounds 338m in the quarter. Single premiums (excluding National Insurance rebates) rose 4 per cent to pounds 1.4bn, as a 20 per cent growth in linked business offset a fall in with-profits business.
In the year to 30 June, pensions annual premiums were down by 2 per cent at pounds 1.1bn, but single premiums were 9 per cent ahead at pounds 5.2bn.
Mark Boleat, recently appointed as the Association of British Insurers' director-general, defended the much-criticised mortgage endowment policy: 'It's a very good way of repaying the mortgage, provided you hold them for 25 years.' Mortgage endowments accounted for only about pounds 200m of the quarterly sales of pounds 5bn.
However, a spokesman said 60 per cent of policies were cancelled before maturity. 'It's in nobody's interest whatsoever . . . for policies to have to be cashed in,' Mr Boleat said.
Mr Boleat said he wanted to see an improvement in the information available about the industry. But a proposal to publicise research on the life insurance market was vetoed by the ABI's members only last week.
View from City Road, page 22Reuse content