Friends Provident yesterday unveiled a record rise in annual new business and sent an upbeat message about its ability to snatch market share from rivals in the next 12 months.
Friends Provident, which has been seen as too small to compete effectively with giants of the life industry such as Aviva, which owns Norwich Union, and Prudential, said life and pension sales rose 14 per cent to £492.2m in the year to December.
The figures, measured on an annual premium equivalent basis, were slightly better than the City had expected, and were driven by consolidation of offshore businesses acquired in late 2002 and a new life assurance distribution agreement with Countrywide Assured, Britain's biggest estate agency.
Keith Satchell, the chief executive of Friends Provident, said: "For this year we see signs of investor confidence returning to the UK, and we have products appropriate to meet that return of confidence. We expect to again increase our market share in 2004."
Earlier in the week its life assurance rival Legal & General was also upbeat on the prospects for new business in 2004, driven by a growing recovery in investor confidence.
However, Standard Life sent shockwaves through the life sector earlier this month when it said it would have to increase reserves in anticipation of new industry rules.
Friends Provident said its market share in the first nine months grew from 3.3 per cent to 4.2 per cent. Analysts expect it to benefit, along with other major life companies, from the problems at Standard Life as some advisers are likely to recommend insurers with more financial strength.
Friends Provident said it did not expect to have any difficulties with the Financial Services Authority's new solvency rules.
Ben Gunn, the managing director of life and pensions, said: "If there is a move away from business [from Standard Life] we would expect to pick up our share of that, but it is still difficult to establish how that is going to pan out."
Sales at Friends Provident's pension arm were up 12 per cent at £176.1m. Fourth-quarter new business grew by 14 per cent to £46.4m. The shares, which have climbed 50 per cent in the past year, closed up 3.25p at 138.25p.
Last month, the FSA fined Friends Provident £675,000 for mishandling customer complaints about endowment mortgage policies.