Prudential UK sales were down by 22 per cent in the third quarter at £157m, following lower volumes of individual annuities, equity-release and corporate pension business.
Over the first nine months of this year, the firm’s UK sales fell 28 per cent on the same period of 2008 from £732m to £531m. Total group sales for the first nine months were £2bn, a drop of 9 per cent on 2008.
Pru saw a rise in sales of with-profits bonds, individual pensions and growth in fund inflows.
The firm says it has maintained strict pricing to reduce the capital strain of writing new business, which is why individual annuity sales were down by 21 per cent over the first nine months of 2009 compared with the same period last year to £164m 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.
It saw a 36 per cent rise in sales of with-profits bonds to £101m over the year to date compared with the same period in 2008. Individual pension business at £34m was 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 by 117 per cent on 2008. Corporate pension sales of £156m were down by 18 per cent for the first nine months, with 20 new schemes taken on this year.
Equity-release volumes fell by 58 per cent following a strict pricing policy. Pru says its capital surplus is £2.8bn, covering its minimum capital requirement 2.4 times. Capital provision against its annuity book in the UK was £1.5bn in September, up from £1.4bn at the half-year results.
Group chief executive Tid-jane Thiam says: “We believe the economic environment will remain uncertain for a while. The group has demonstrated its strong defensive capabilities and is now well positioned to benefit from the next stage of the economic cycle.”