Prudential, the UK's largest life insurer, revealed yesterday the stark effect of a world-wide slump in its sales of insurance products as it announced that its single-premium income dropped by 11 per cent in 1995 to about pounds 4.4bn.
World-wide sales of the Pru's regular premium life and pension products also fell by 3 per cent, to pounds 500m.
But the company claimed that, despite the sales fall, there were some signs of a recovery in the life and pensions market. Results in the fourth quarter showed the Pru's premium income was about 10 per cent up on the previous three months.
The recovery throughout the latter part of last year was also apparent in the UK, the company claimed, with life and pension sales up in the last three months of the year compared with the same period a year earlier. Peter Davis, group chief executive, said: "I am encouraged that in difficult markets in the UK sales continued to show signs of improvement."
The company's view reflects a survey jointly carried out by the Confederation of British Industry and Coopers and Lybrand, which predicted a pick-up in business next quarter.
Prudential's investment product sales, however, fell last year, with regular premium investments down from pounds 96m to pounds 36m. One-off sales tumbled from pounds 251m in 1994 to pounds 111m last year. In Britain, sales of annual and regular premium life and pension products dropped by 8 per cent to pounds 244m and pounds 2bn respectively.
The decline was particularly marked in the unit trust and PEP business, where income fell from pounds 168m to pounds 61m. The collapse in confidence in the Pru's unit trusts and Peps was even starker among independent financial advisers, who steered just pounds 17m of their clients' money towards the Pru, down from pounds 61m in 1994. The company did succeed in tapping into the market for pensions annuities, where sales for 1995 were up 39 per cent to pounds 590m.
New premium figures for General Accident Life in 1995 fell 26.2 per cent into pounds 33.6m in 1995, while annual premiums as a whole were down 20.7 per cent to pounds 42.3m. However, the company's new single premiums rose 60 per cent to pounds 893m.Reuse content