New business flat at Prudential

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SHARP falls in sales from Prudential's US subsidiary, Jackson National Life, caused the group to record flat new business for the first six months of the year, despite the continuing strength of Prudence Bond investments.

Annual premium sales at Jackson National fell from pounds 48m to pounds 30m while single premiums fell from pounds 851m to pounds 519m. Mick Newmarch, Prudential's chief executive, blamed low US interest rates for reducing the demand for fixed-interest annuity products but also said that Jackson National had planned a slowdown in term assurance sales.

Because of the strength of sterling, the life insurer's worldwide annual premiums slipped from pounds 315m to pounds 310m and its single premiums from pounds 1,842m to pounds 1,837m.

UK annual premiums grew by 6 per cent to pounds 172m. But single premiums climbed 56 per cent to pounds 1.064bn, with life and general annuity business surging more than five-fold to pounds 361m on the back of strong sales of Prudence Bond, a with-profits investment contract.

Personal pensions contributed another pounds 447m of single-premium business, a 15 per cent rise, and there was a similar increase to pounds 242m for single investments for group pensions.

Mr Newmarch said Prudential showed 'increased penetration of the independent financial adviser market, the benefits of the restructuring of our direct sales force and the continuing popularity of the Prudence Bond'.

Clerical Medical, the mutual office, reported a 30 per cent rise in total new business to pounds 469.6m, pounds 425.4m from single premiums.

CMI International, the group's offshore arm, increased its business by 148 per cent to pounds 99.3m.