Norwich Union PLC - 3 Months New Business Figures
April 19 2000 - 3:01AM
UK Regulatory
RNS Number:3065J
Norwich Union PLC
19 April 2000
NORWICH UNION WORLDWIDE NEW LONG-TERM SAVINGS BUSINESS FIGURES: THREE MONTHS
TO 31 MARCH 2000
HIGHLIGHTS
- Worldwide new business premiums increased by 69% (in local currency) to
#1.2 billion
- UK new business premiums increased by 86% to #882 million
- Worldwide annual premium equivalent* up 58% (in local currency) to #179
million
- UK annual premium equivalent* up 67% to #122 million, a record quarter
- UK Isa, Pep, Oeic and unit trust sales up over 900% in annual premium
equivalent* terms
- European annual premium equivalent* growth of 63% (in local currency)
*Annual premium equivalent is total new annual premiums plus 10% of single
premiums.
Norwich Union group chief executive Richard Harvey said:
"Norwich Union has again delivered an outstanding increase in new worldwide
long-term savings sales for the first three months of 2000. These figures
reflect the momentum built up in 1999 and have produced a 69% increase in
local currency in new business premiums to #1.2 billion (1999: #698 million).
"An enhanced marketing strategy and our continued investment in the Norwich
Union brand have been key contributors in achieving this year-on-year success.
"The promotion of Norwich Union's investment expertise and our support for
Cat-standards is also paying off. Sales of Isas in the first quarter
considerably outstripped sales of Peps in the equivalent period last year,
with Norwich Union being a significant player in the Isa market.
"Further afield, results from our overseas operations reflect an excellent
first quarter, with our European operations achieving a growth of 63% in local
currency in annual premium equivalent terms. As our overseas operations
continue to increase in significance, we look forward to taking advantage of
the enhanced distribution opportunities offered by CGU's international
operations.
"We are delighted that our Navigator product, excluded from the headline
figures, continues to go from strength to strength with growth of 39%."
United Kingdom (up 67%)
New long-term savings business for the first quarter of 2000 achieved 67%
growth over the same period in 1999 on an annual premium equivalent basis.
Sales reached #122 million annual premium equivalent in a record quarter for
Norwich Union (1999: #74 million).
Single premium bond sales of #304 million were up 85% (1999: #164 million),
with average daily sales of #4.8 million. This excellent performance reflects
the attractiveness of the product range and our continuing strong relationship
with IFAs.
Individual pensions sales of #20 million annual premium equivalent were up 43%
(1999: #14 million), reflecting increased marketing efforts. Growth in group
personal pensions of 38% to #12 million annual premium equivalent (1999: #9
million) is a pleasing performance in difficult conditions, which will prevail
until the introduction of stakeholder pensions. Norwich Union is planning to
introduce a range of new pensions products during 2000 that embrace
stakeholder principles and make further use of new technology. This is part
of an ongoing programme of development to ensure optimum positioning for the
launch of stakeholder pensions in 2001.
Sales of other group pensions of #16 million annual premium equivalent
represent a 129% increase (1999: #7 million). This strong performance results
from successes in attracting pooled managed pension funds single premium
business of #57 million (1999: #14 million).
Annuity sales of #157 million have increased by 5%, reflecting sales of with-
profit annuities of #22 million (1999: nil) and our continuing policy of
pricing conventional annuities for profit.
Norwich Union is a leader in the creditor market, with creditor life and
disability business contributing #8 million annual premium equivalent, an
increase of 167% (1999: #3 million).
New investment funds business has achieved single premium sales of #143
million (1999: #15 million) in the run up to the end of the tax year. The
Higher Income Plus fund, part of Norwich Union's Cat-standard ISA range,
continues to prove very attractive to investors, attracting #62 million in
sales. Over the quarter, UK and European equity fund performance has been
outstanding, with the Norwich UK Growth fund ranked as the number one in its
sector over the last 3 months.
Europe and International (up 43%)
Norwich Union's annual premium equivalent new business in overseas markets has
grown by 43% (in local currency) to #56 million.
Europe (up 63%)
Annual premium equivalent of #38 million for our European operations reflects
excellent first quarter growth of 63% (in local currency). Single premium new
business has increased by 73% to #111 million (in local currency) and regular
premium new business by 59% (in local currency) to #27 million.
Single premium growth has been driven by the Celebration Bond product in
Ireland and in France by the 1999 award winning unit linked multi-fund
contract. In Ireland, exceptional growth of 79% (in local currency) in single
premium sales has been achieved, and early indications are that the recently
launched 2000 version of the Celebration Bond will continue this growth. In
France, single premium sales were up 61% (in local currency) to #45 million,
and future performance is expected to benefit from recently winning a coveted
award for the best European Equities Fund in 1999.
The increase in regular premiums reflects a #9 million contribution from
Poland, representing the value of pension policies which have been redirected
from the State Scheme, and a 20% growth (in local currency) in Irish pensions
sales.
Late in the first quarter of 2000 we launched Norwich Union International, an
offshore life and investment business based in Dublin. This innovative
proposition, based on the Navigator concept in Australia offers tax-efficient
products to high net worth individuals and has generated significant interest
since launch.
International (up 13%)
Increased sales of our unit trust and pension products in Australia
contributed to an annual premium equivalent growth in International of 13% (in
local currency) to #18 million.
Although not included in the new business figures, Navigator sales in
Australia increased by 39% (in local currency) over 1999 to A$424 million,
giving total funds under administration of A$5.2 billion. Further benefits
from our Portfolio Partners and Paladin acquisitions were demonstrated by a
25% increase (in local currency) in mandate sales to A$288 million.
Enquiries:
Analysts: Philip Scott, Chief Executive (UK Long-Term Savings) on 01603 683936
Rebecca Burrows, Investor Relations & Corporate Communications
Director on 01603 680117
Media: James Duffell or Louise Zucchi on 01603 683820
Notes to Editors:
New business figures have been translated at average exchange rates applying
for the period.
2000 1999
Australia #1 = A$2.5463 #1 = A$2.5762
France #1 = FF10.6818 #1 = FF9.5596
Ireland #1 = IR#1.2825 #1 = IR#1.1478
Poland #1 = PLZ6.6061 N/A
Spain #1 = Pta270.9485 #1 = Pta242.4832
The new business results cover the period ended 31 March 2000.
Annual premium equivalent (APE) is an industry standard for calculating life,
pensions and investments new business levels. It is the total of new regular
premiums plus 10% of single premiums.
Annual Premium Equivalent
3 months 3 months 3 months
to to to
31 March 31 March 31 March
2000 1999 1999
#m #m #m
(at
2000
Exchange
Rates)
United Kingdom
Regular 37.0 29.0 29.0
Single 70.1 43.0 43.0
107.1 72.0 72.0
Europe (excluding UK)
Regular 27.0 17.0 19.0
Single 11.1 6.4 7.2
38.1 23.4 26.2
International
Regular 4.0 3.0 3.0
Single 5.7 5.3 5.3
9.7 8.3 8.3
Total life and pensions 154.9 103.7 106.5
Unit trusts, Oeics, Peps and Isas
United Kingdom 15.3 1.5 1.5
Europe 0.0 0.0 0.0
International 8.5 7.8 7.7
Total long-term savings 178.7 113.0 115.7
UNAUDITED
Analysis of Worldwide New Business
Regular Single
3 months 3 months 3 months 3 months
to to to to
31 March 31 March 31 March 31 March
2000 1999 2000 1999
#m #m #m #m
United Kingdom
Life
Unitised with-profit and unit- 2 4 304 164
linked
Non-profit 8 5 10 3
10 9 314 167
Personal Pensions
Conventional with-profit - - 14 9
Unitised with-profit and unit- 7 6 111 67
linked - individual
Unitised with-profit and unit- 11 8 9 6
linked - group
Non-profit - - - -
18 14 134 82
Group Pensions
Conventional with-profit 2 1 2 1
Unitised with-profit and unit- 5 3 74 17
linked
Non-profit 1 1 - -
8 5 76 18
Annuities - - 157 150
Other 1 1 20 13
37 29 701 430
Europe (excluding UK)
Ireland 7 7 52 33
France 8 9 45 31
Spain 2 2 9 7
Poland 9 - - -
Other European Union 1 1 5 1
27 19 111 72
International
Australia 3 2 56 52
Other 1 1 1 1
4 3 57 53
Total life and pensions 68 51 869 555
Personal Equity Plans and Isas 1 - 92 11
Unit trusts and Oeics
-UK - - 51 4
-Europe - - - -
-International - - 85 77
Total long-term savings 69 51 1,097 647
Analysis of UK long-term savings sales by distribution channel
IFA - life and pensions products 29 25 658 404
- investment products 1 - 97 6
Direct - life and pensions products 8 4 43 26
- investment products - - 46 9
Total 38 29 844 445
UK unitised with-profit and unit-linked pension single premiums shown above
include NICO rebates of #22 million (1999: #8 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 2000 results in the restatement of the 1999
total regular premiums from #51 million to #49 million and from #647 million
to #640 million for total single premiums.
END
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