The worldwide total was also down, from pounds 223m to pounds 196m. Despite this setback, total new money received by the group increased sharply from pounds 2.2bn to nearly pounds 3.4bn. Most of this, some pounds 2.2bn, was new managed and segregated fund business attracted by Legal & General's investment managers, much of it index fund money on which profit margins are low.
Commercial Union and Friends Provident, the mutual life office which receives 25 per cent of its business from Abbey National, reported more resilient life insurance sales. Commercial Union increased new annual premiums by 23 per cent to pounds 180m, though the rise is cut to 9 per cent if exchange rate movements are excluded. CU saw a 4 per cent improvement in UK mortgage endowment business to pounds 18.8m. Friends Provident lifted new regular premiums by 4 per cent to pounds 115.3m.
All three companies achieved large increases in single premiums (lump sum investments) aided by sales of with-profits investment bonds.
L&G increased with-profit bond sales from pounds 30.1m to pounds 112.2m. Friends Provident lifted its sales from pounds 65m to pounds 146m, and Commercial Union sold pounds 300.5m of bonds to increase its UK life single premiums from pounds 18.8m to pounds 316.7m.
Legal & General said the weakness of regular premium sales reflected customers' reluctance to commit themselves to longer term contracts. The company receives half its business from its salesforce of 2,600, a quarter from its tied agents (which include Cheltenham & Gloucester Building Society) and the rest from independent financial advisers.
Friends Provident received pounds 185.6m of lump sum pension investments, giving total single premiums of pounds 391.6m. The life office is about to lose the business from Abbey National, which has set up its own insurance subsidiary. Friends has now established its own direct sales force.
Commercial Union wrote pounds 426.12m of single premiums in the UK, a 246 per cent increase, pounds 246.7m with Delta Lloyd in the Netherlands and a total of pounds 1,049.3m, a 55 per cent improvement on last year.Reuse content