Norwich Union PLC - Re New Life Business Figures
July 21 1998 - 3:30AM
UK Regulatory
RNS No 5619t
NORWICH UNION PLC
20 July 1998
NORWICH UNION NEW LIFE BUSINESS FIGURES: HALF YEAR TO 30
JUNE 1998
Norwich Union today announced an increase of 14% (in local
currency terms) in new worldwide life, pensions and
investment business figures for the first half of 1998 over
the same period in 1997. This was made up of 18% growth in
the UK and 6% (in local currency) in Europe and
International. New single premium life and investment
business increased by 22% (in local currency).
In sterling terms, worldwide new business annual premium
equivalent (APE), of #193m increased by 11% over the same
period in 1997 (#174m).
Norwich Union's group chief executive Richard Harvey
said: "An 18% increase in UK sales continues the encouraging
start Norwich Union has made to 1998. We are continuing to
improve our product range to build on our competitive
position in the IFA market place and, coupled with the
excellent service levels we already provide, this puts us in
a sound position for the rest of the year. A 14% increase
worldwide is a good result against the markets in which
Norwich Union operates".
United Kingdom (up 18%)
Norwich Union's new life, pensions and investment business
continued to grow in the second quarter 1998. On a year to
date basis, annual premium equivalent sales increased by 18%
to #129m APE (#109m).
Single premium business (excluding unit trusts and PEPs),
increased by 35% to #683m (#507m). Sales of unit linked
bonds have been particularly strong (up 77%) following the
launch of our managed portfolio bond. Annuities have also
performed very well in the first half of 1998 compared to
the low levels at the beginning of 1997. Pension products
continue to be developed to reflect the market preference
for single premium investment and a lifestyle feature has
recently been added to certain pension products.
Regular premium new business levels have increased with
executive pension schemes and group personal pensions
continuing to perform well above last year's levels, with an
increasing number of schemes being won.
Europe and International (up 6%)
In local currency terms Norwich Union's European and
International operations showed an annual premium equivalent
growth of 6%.
Regular premium new business increased by 11% (in local
currency), boosted by sales of unit linked pension business
in Ireland and Spain.
Sales of new single premium business in France have been
particularly encouraging given a substantial decline in the
market following tax changes introduced at the start of the
year. There has been continued success with the Celebration
Bond II product in Ireland. Norwich Union has focused on
writing profitable business rather than volume in Australia
which, together with the impact of the strengthening of
sterling, has resulted in a reduction in new business single
premiums compared with 1997.
Growth in unit trust sales of 6% (in local currency)
occurred mostly in Australia.
Although not included for new business reporting, sales of
Norwich Union's Navigator product in Australia have improved
33% (in local currency) to #220m. If included European and
International operations would show an annual premium
equivalent growth of 12% (in local currency).
Date of Interim Announcement:
Norwich Union has brought forward the announcement of the
interim results for the half year ended 30 June to 8
September (previously planned for 9 September).
Enquiries:
Analysts: Philip Scott on 01603 683936
Press enquiries: James Duffell on 01603 680874
Note to editors:
*New business figures have been translated at average
exchange rates applying for the period:
1998 1997
Australia #1 = A$2.5511 #1 = A$2.1802
France #1 = FF9.9895 #1 = FF9.5785
Ireland #1 = IR#1.1868 #1 = IR#1.0910
The new business results cover the half year ended 30 June
1998.
Annual Premium Equivalent (APE) is an industry wide standard
of calculating new business levels. It is defined as the
level of annual premiums plus 10% of the single premiums.
Annual Premium Equivalent
Half Half Half
year year year
to to to
30 Jun 30 Jun 30 Jun
1998 1997 1997
#m #m #m
(on
1998
exchange
rates)
Total UK
Regular 56 54 54
Single 68 51 51
European Union (excl. UK)
Regular 32 27 28
Single 12 11 11
International
Regular 7 8 9
Single 8 9 11
Total consolidated life 183 160 164
insurance
Unit trusts and PEPs
United Kingdom 5 5 5
EU & International 5 5 5
Total 193 170 174
UNAUDITED
Analysis of Worldwide New Business
Regular Single
Half Half Half Half
year year year year
to to to to
30 Jun 30 Jun 30 Jun 30 Jun
1998 1997 1998 1997
#m #m #m #m
UK
Life
Unitised with profit and unit 5 5 156 148
linked
Non profit 8 8 1 -
Personal Pensions
Conventional with profit 2 2 20 15
Unitised with profit and unit 26 25 136 128
linked
Non profit 1 1 1 -
Group Pensions
Conventional with profit 4 5 4 2
Unitised with profit and unit 7 5 46 58
linked
Non profit 1 1 - -
Annuities - - 319 156
Other 2 2 - -
Total UK 56 54 683 507
European Union (excluding UK)
- Ireland 9 8 31 15
- France 16 15 52 55
- Other 7 5 40 48
Total 32 28 123 118
International
- Australia 5 6 74 105
- Other 2 3 3 3
Total 7 9 77 108
Consolidated life insurance 95 91 883 733
Personal Equity Plans - - 23 22
Unit Trusts - UK - - 22 24
Unit Trusts - Europe and - - 50 54
International
Total 95 91 978 833
Analysis of UK Life Sales by distribution channel
IFA 50 50 666 493
Direct 6 4 17 14
Total 56 54 683 507
Unitised with profit and unit linked pension single premiums
include #21m in respect of DSS rebates (1997: #24m) of which
#12m is an accrual in respect of delayed payments due from
the Contributions Agency in 1998.
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 1998 results in the
restatement of the 1997 total regular premiums from #91m to
#89m and from #833m to #804m for total single premiums.
The 1997 comparatives exclude the new business written by
Norwich Union Life Insurance (New Zealand), (#2m of regular
premium, #3m of single premium life and investment business)
which was sold with effect from 31 December 1997.
END
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