Prudential reports insurance sales drop

NEW insurance business at Prudential, Britain's biggest insurer, fell in the first half of 1994. Sales of regular-contribution life and pension products were pounds 244m worldwide, compared with pounds 266m in the first half of 1993. Single premiums fell from pounds 2.9bn to pounds 2.7bn.

Buoyant sales of unit trusts and PEPs helped offset the insurance decline. Sales of regular-contribution products increased fivefold to pounds 64m while single sales rose 14 per cent to pounds 176m.

Total worldwide sales of regular contribution products rose 11 per cent to pounds 308m, while single contributions fell 6 per cent to pounds 2.9bn.

For the first time, the Pru reported sales of investment products with the insurance figures, because of their growing importance. Investment products now account for 20 per cent of regular sales and 6 per cent of single-payment sales.

The decline in pensions and insurance sales reflected difficulties in the US and weak sales of life insurance in the UK. Mick Newmarch, group chief executive, said: 'In contrast to the first half of 1993, 1994 has, so far, proved to be a difficult time for the UK insurance market.' He said the benefits of last year's restructuring were beginning to appear.

Sales at Jackson Life, the US subsidiary, were down, but the Pru said there had been a steady improvement through the first half of 1994. Sales were growing strongly in the Asia Pacific region.

London and Manchester, the smaller life assurance group based in Exeter, said annual sales were 3.5 per cent higher than in the first half of last year, with corporate pensions business up 29.9 per cent. David Hubbard, chairman, said a turning point in the market was now evident.