Provident boom with help from its Friends

Friends Provident, the insurer, reported bumper sales of savings products yesterday, and promised to increase its market share further.

The insurer's results, which contrast sharply with those of its other, larger rivals, showed that sales over the past nine months were up 14 per cent to £313m. Over the past quarter, sales were up 24 per cent to £114m. Legal & General, Aviva and Prudential all recently reported a fall in nine-month sales, blaming the turbulence of stock markets for dampening consumer confidence and putting customers off saving.

"This is the best quarter we have had in what has been a pretty difficult market," Ben Gunn, managing director of the Friends Provident life and pensions business, said. "Consumer confidence is still fragile but we believe we can continue to grow market share."

Friends, run by its chief executive, Keith Satchell, reported record sales of protection products. These were up 50 per cent to £48m over the past nine months, with very strong third-quarter sales up 46 per cent. The company has benefited from its tie-up with Countrywide Assurance, the estate agency, through which it sells life insurance. "Our market share has been at around 3 per cent. It was at 4 per cent at the half year and is up to about 4.3 per cent this quarter. We want to have 10 per cent in the next three years," Mr Gunn said.

The company's online sales capability is helping Friends to lower its operating margins. Overall, 70 per cent of its business through IFAs in the third quarter was written using the internet, compared with less than 30 per cent the same time last year.

Shares in Friends closed up nearly 2 per cent at 134.5p, giving the company a market capitalisation of £2.3bn.