Rise in Pru income signals upturn for insurers
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Your support makes all the difference.Prudential, the UK's largest insurer, yesterday provided the first evidence that the deep slump in the life insurance industry might be drawing to a close as it released quarterly figures showing that world-wide single- premium income grew by 12 per cent to pounds 1.6bn, writes Nic Cicutti.
In the UK, sales of the company's single-premium products rocketed by 34 per cent to pounds 866m, the highest quarterly total for more than two years. However, sales of regular premium products dipped slightly to pounds 71m against the same period last year, indicating a continuing preference by savers for lump-sum investments.
Peter Davis, group chief executive at Prudential, said: "I am particularly encouraged by the healthy progress made in the UK, where product developments and improvements in the sales process have resulted in single-premium sales being at their highest level for more than two years."
Prudential's figures were boosted by sales of annuity-linked products, together with its well-established Prudence Bond. In addition, PEP sales grew by 67 per cent to pounds 47m.
The company's growth in premium income comes as the insurance industry slowly begins to overcome the problems it has faced in the past two years.
The Association of British Insurers, the industry trade body, said yesterday that its own statistics showed tentative signs of a recovery in late 1995, boosted by rising house prices and a return of the "feel-good factor".
Commercial Union, the composite insurer, said it expected its own profits to grow this year. John Cowan, sales and marketing general manager at Scottish Amicable, said: "There is a definite feeling within the market that there is a recovery of confidence. I have reported to my own board a double-figure improvemnt in sales in the first quarter."
David Prosser, chief executive at Legal & General and chairman of the ABI's life insurance council, said: "I talk to chief executives within the industry quite regularly and the consensus is that we are trading at 1994 levels." L&G's own figures mirrored this, he added.
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