Pru UK sales slide 22% in Q3 to £157m

28 October 2009 8:21 am | By Leah Milner

Over the first nine months of 2009, UK sales were down 13 per cent on the same period of 2008 at £531m.

The UK figures compare with total group insurance sales of £700m for Q3, a year-on-year drop of 9 per cent. Total group sales for the first nine months were £2bn, a drop of 9 per cent on 2008.

In the UK Prudential saw an increase in sales of with-profits bonds, individual pensions and growth in fund inflows.

Prudential UK says it has maintained strict pricing to reduce the capital strain of writing new business, which is why individual annuity sales were down 21 per cent over the first nine months of 2009, compared with the same period last year, to £164 million annual premium equivalent.

Pru says this was the result of a 13 per cent reduction in average case sizes as well as depressed asset values and the decision by some customers to defer retirement.

Pru saw a 36 per cent increase in sales of with-profits bonds over the year-to-date compared with the same period in 2008 at £101m.

Individual pension sales of £34m were also 36 per cent higher than in the first nine months of 2008.

Sales of the flexible retirement plan, a factory-gate priced individual pension product, have grown to £15m, up 117 per cent on 2008, boosted by the addition of PruFund as an investment option in November last year.

Corporate pension sales of £156m were down 18 per cent on for the first nine months of 2008, with 20 new schemes taken on this year.

The PruHealth joint venture with Discovery now has 219,000 lives insured, an increase of 16 per cent over the same period in 2008, and gross written premiums were £76m, up 12 per cent.

Equity Release volumes have fallen 58 per cent following a strict pricing policy.

Over the past three quarters, M&G has seen gross fund inflows of £18.4bn, an increase of 52 per cent over the same period in 2008.

Net inflows reached a record £11.1bn, a year-on-year increase of 169 per cent.

In the third quarter, net inflows were £2.5bn, up 47 per cent on the same period last year.

In the US, Prudential benefitted from other players pulling out of the variable annuity market, and saw Q3 sales up 66 per cent at £249m, while in Asia, sales only increased 4 per cent due to the disposal of the Taiwan agency business earlier this year.

Pru says its capital surplus is £2.8bn, covering its minimum capital requirement 2.4 times.

Its capital provision against its annuity book in the UK was £1.5bn in September, up from £1.4bn at the half-year results.

Nic Nicandrou has now joined Prudential as chief financial officer and board director.

He joins from Aviva, where he has worked for eleven years in a number of senior finance roles, most recently as Norwich Union Life, finance director and board member.

Group chief executive Tidjane Thiam says: “We believe that the economic environment will remain uncertain for a while. The group has clearly demonstrated its strong defensive capabilities and is now well positioned to benefit from the next stage of the economic cycle.”

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