Life insurers take 5.1bn pounds in record sales quarter

Click to follow
The Independent Online
LIFE insurance companies took pounds 5.1bn in new premiums between April and June this year, the industry's most successful quarter yet for sales.

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 22

Comments