The Association of British Insurers is blaming a combination of poor economic conditions and changes to capital gains tax for falling investment bond business in the second quarter of 2008.
It says single-premium investment bond sales were down by 26 per cent to £6.86bn in Q2 compared with the same period last year.
Spokesman Jon French says: “To a certain extent, the data reflects conditions in the overall economy. Bond sales have suffered for a variety of reasons, including the changes to the capital gains tax regime.”
Regular-premium protection business in Q2 rose by 13.6 per to £1.59bn compared with £1.42bn in Q2 2007 but single-premium protection business dipped by 9.5 per cent to £18.73bn from £20.7bn.
New regular-premium individual pension new business increased by 12.5 per cent to £976m from £868m while new single-premium individual pension business was down by 11.2 per cent to £5.99bn from £6.75bn.
CBK Colchester principal Peter Chadborn says: “Single-premium protection business is very rare, so a drop is neither here nor there but a rise in regular-premium business is encouraging.
“However, whenever any increase in business levels are being reported, how much of that is new business and how much is rebroked business?”