Norwich Union PLC - Business Figures to 31/12/99
January 25 2000 - 2:01AM
UK Regulatory
RNS Number:3225E
Norwich Union PLC
25 January 2000
NORWICH UNION WORLDWIDE NEW LONG-TERM SAVINGS BUSINESS FIGURES:
YEAR TO 31 DECEMBER 1999
Norwich Union has delivered an outstanding increase of 50% - to #630 million
annual premium equivalent - in new worldwide life, pensions and investment
business for 1999 (1998: #421 million). Strong growth in its UK, European and
International businesses underpin this excellent result.
Norwich Union group chief executive Richard Harvey said:
"This is a superb set of results, continuing the momentum of the previous
three quarters. In the UK growth of 46% has been achieved through our ongoing
investment in distribution, product development and brand support. We
increased our share of the expanding IFA market while substantially growing
the contribution from other distribution channels. The continued focus on our
key long-term savings markets has paid off, with single premium bond sales
surpassing #1 billion.
"Sales of investment products are also very encouraging, with Isa sales
considerably ahead of those of Peps in 1998, showing the benefits of our
strong investment profile and our support for Cat-standards.
"Results in Europe and International are at an unprecedented level with sales
up 58% in local currency. This impressive growth excludes sales of our
Navigator product which also experienced a record year delivering sales of
A$1.6 billion, up 37%. The Navigator concept is being adapted for the European
market and is due to be launched in Italy next month, with sales in the UK and
Spain following soon after."
United Kingdom (up 46%)
In a record year, Norwich Union's new long-term savings business achieved
successive quarter on quarter growth, and strong performance across the
product range. Sales in 1999 were up an impressive 46% at #412 million annual
premium equivalent, from #283 million in 1998.
Competitive pricing, a comprehensive product range, and favourable economic
conditions have resulted in outstanding single premium bond sales of #1,037
million, 165% ahead of 1998 (#392 million). Average daily sales continued to
accelerate during the fourth quarter at #5.7 million, an increase of 34% on
the third quarter.
Group personal pensions sales have increased by 14% to #41 million annual
premium equivalent (#36 million), a good performance in the difficult market
created by the impending introduction of stakeholder pensions. Group pensions
sales have increased by 31% to #44 million annual premium equivalent, which
includes an increase of 151% in investments in pooled managed pension funds to
#153 million (#61 million). Sales volumes of other pension products have been
maintained. Norwich Union will continue to strengthen its existing
stakeholder-friendly offering throughout 2000, and is well positioned for the
launch of stakeholder pensions in 2001. We expect stakeholder to support the
growth of defined contribution pension arrangements and we intend to exploit
the opportunity to expand market share in the more profitable segment of this
market rather than focus on a standardised price-driven stakeholder product.
Annuity sales have increased by 17% during 1999 to #775 million (#660
million), including #42 million in respect of with-profit annuities which
commenced sales in August 1999.
Norwich Union is a leader in the creditor market following the acquisition of
London & Edinburgh, with creditor life and disability contributing #23 million
annual premium equivalent, which is 6% of total UK sales (#6 million: 2%).
New investment funds business (Isas and Oeics) is up 296% to #27 million
annual premium equivalent (#7 million). The Higher Income Plus fund launched
in October 1999, has already attracted investments of #49 million and built on
Norwich Union's successful Cat-standard Isa range.
Europe and International (up 58%)
Norwich Union's annual premium equivalent new business in overseas markets has
grown by 58% (in local currency) to #218 million.
Europe (up 62%)
European operations delivered impressive growth in long-term savings new
business of 62% (in local currency) to #134 million annual premium equivalent.
Regular premium new business rose by 77% (in local currency) to #99 million,
while single premium new business grew by 32% (in local currency) to #352
million.
Ireland delivered an outstanding increase of 53% (in local currency) in annual
premium equivalent to #36 million, achieved through its established
Celebration Bond product and the introduction of property funds to support the
Portfolio Bond. Strong unit-linked sales have boosted annual premium
equivalent in France to #43 million (an increase of 11% in local currency)
while difficult market conditions have adversely impacted annual premium
equivalent in Spain.
In March 1999 Norwich Union launched a new personal pension business in
Poland. By the end of December 500,000 pension policy applications had been
received in the newly-privatised Polish market, placing Norwich Union amongst
the leading players in this market with an estimated share of 6%. Norwich
Union Poland has recognised #37 million of annual premium for this business
representing the value of those policies where pension payments have been re-
directed from the State scheme. Further annual premiums will be recognised in
2000 as payments on the remaining policies are received.
International (up 52%)
Norwich Union's continuing success in the Australian unit trust market and
growing bond and pensions sales contributed to an increase in International
long-term savings new business of 52% (in local currency) to #83 million
annual premium equivalent. Bolstered by the acquisitions of leading fund
management companies Portfolio Partners and Paladin, unit trust sales
increased by 155% (in local currency) to #411 million.
Although not included in the new business figures, our Navigator product in
Australia has had its best year ever with record contributions for 1999 of
A$1,586 million, up 37%, bringing associated funds under administration to
A$4.8 billion. In addition, wholesale fund mandate sales increased by 54% to
A$1,383 million reflecting the strong performance of Portfolio Partners and
Paladin.
Analyst enquiries
Philip Scott, Chief Executive (UK Long-Term Savings) on 01603 683936
Rebecca Burrows, Investor Relations & Corporate Communications Director on
01603 680117
Media enquiries
James Duffell or Liz Maw on 01603 683820
Notes to Editors:
New business figures have been translated at average exchange rates applying
for the period.
1999 1998
Australia #1 = A$2.5073 #1 = A$2.6392
France #1 = FF9.9678 #1 = FF9.7701
Ireland #1 = IR#1.1968 #1 = IR#1.1633
Poland #1 = PLZ 6.4206 N/A
Spain #1 = Pta252.8376 #1 = Pta247.4377
The new business results cover the year ended 31 December 1999.
Annual premium equivalent (APE) is an industry standard for calculating life,
pensions and investment new business levels. It is the total of new regular
premiums plus 10% of single premiums.
Annual Premium Equivalent
12 months 12 months 12 months
to to to
31.12.99 31.12.98 31.12.98
#m #m #m
(at 1999
Exchange
Rates)
United Kingdom
Regular 139.0 126.0 126.0
Single 245.6 149.7 149.7
384.6 275.7 275.7
Europe (excluding UK)
Regular 99.0 56.0 59.0
Single 35.1 26.2 26.8
134.1 82.2 85.8
International
Regular 17.0 15.0 14.0
Single 25.3 23.7 22.5
42.3 38.7 36.5
Total life and pensions 561.0 396.6 398.0
Unit trusts, Oeics, Peps and Isas
United Kingdom 27.3 6.9 6.9
Europe 0.1 0.4 0.4
International 41.1 16.1 15.3
Total long-term savings 629.5 420.0 420.6
UNAUDITED
Analysis of Worldwide New Business
Regular Single
12 12 12 12
months months months months
to to to to
31.12.99 31.12.98 31.12.99 31.12.98
#m #m #m #m
United Kingdom
Life
Unitised with-profit and 15 13 1,037 392
unit-linked
Non-profit 29 21 33 6
44 34 1,070 398
Personal Pensions
Conventional with-profit 2 3 30 35
Unitised with-profit and 23 24 324 289
unit-linked -individual
Unitised with-profit and 39 34 24 23
unit-linked - group
Non-profit - 1 1 2
64 62 379 349
Group Pensions
Conventional with-profit 8 8 3 3
Unitised with-profit and 15 14 167 83
unit-linked
Non-profit 4 3 - -
27 25 170 86
Annuities - - 775 660
Other 4 5 62 4
139 126 2,456 1,497
Europe (excluding UK)
Ireland 18 16 179 84
France 29 28 141 119
Spain 10 11 24 60
Poland 37 - - -
Other European Union 5 4 7 5
99 59 351 268
International
Australia 12 9 246 220
Other 5 5 7 5
17 14 253 225
Total life and pensions 255 199 3,060 1,990
Unit trusts and Oeics-UK 1 - 60 35
-Europe - - 1 4
-International - - 411 153
Personal Equity Plans and Isas 11 - 93 34
Total long-term savings 267 199 3,625 2,216
Analysis of UK long-term savings sales by distribution channel
IFA - life and pensions products 115 116 2,309 1,458
- investment products 6 - 93 42
Direct - life and pensions products 24 10 147 39
- investment products 6 - 60 27
Total 151 126 2,609 1,566
UK unitised with-profit and unit-linked pension single premiums shown above
include DSS rebates of #83 million (#100 million).
New business premiums from Europe and International businesses have been
translated at the average exchange rates applying for the period. The impact
of exchange rate movements in 1999 results in the restatement of the 1998
total regular premiums from #199 million to #197 million and from #2,216
million to #2,230 million for total single premiums.
END
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