Prudential reaches a record

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NEW BUSINESS won by Prudential Corporation was at record levels last year as Britain's biggest insurance company sharply raised its sales of single-premium life insurance and pensions.

The figures, in the past hardly price-sensitive, aroused more than usual interest in the stock market because this spring the Pru will move towards putting its annual accounts on an accruals basis, which will reflect the company's success in winning new business. The share price rose 9p to 296p.

Accounts drawn up on an accruals basis - which includes new business, existing business and investment returns - will be published about a month after the standard statutory accounts, which are due on 23 March. The statutory accounts do not get a boost from new business.

The Pru's biggest success last year was selling its life investment bond, called the Prudence Bond, of which more than pounds 1bn have been bought since the launch.

Mick Newmarch, Prudential's group chief executive, said this helped to increase market share and also trebled the number of independent financial advisers the company dealt with. 'We are well on the way to achieving our goal of a 10 per cent share of this market.' Sales of single-premium business are dominated by independent advisers, rather than the direct sales force for which the Pru has been best known.

Group-wide, new annual premium business rose only pounds 10m to pounds 672m while single premiums rose by a third to pounds 4.2bn after a 25 per cent rise the year before.

In the UK, the Pru is the largest provider of personal pensions. But despite the recession, which makes people think twice about long-term commitments, annual premium contracts held steady at pounds 134m. In contrast, single premiums rose 15 per cent to pounds 589m.

Overseas business jumped sharply, although the figures were flattered by the fall in the pound. The total in sterling was up pounds 526m to pounds 2.22bn.

While the Pru's results were in line with expectations for the industry as a whole this year, the small insurer United Friendly produced an even more buoyant figure, with new life premiums up 26 per cent to pounds 25.9m and single premiums up more than fivefold from pounds 7.6m to pounds 39.6m.

Meanwhile, Scottish Mutual Assurance, the insurance subsidiary of Abbey National, reported a 29 per cent increase in new income for 1992.