Prudential has reported a 28 per cent surge in UK sales during the first quarter but warns that reforms announced in the Budget will have a “significant” impact on individual annuity sales.
The provider’s Q1 interim management statement, published last week, reveals that overall UK sales rose from £185m in Q1 2013 to £237m this year. This increase was predominantly driven by bulk annuity new business. The insurer wrote £73m of bulk annuity sales in Q1 2014, having written no new business in Q1 2013.
Individual annuity sales were £36m in Q1, 35 per cent lower than the £55m figure reported last year. The provider says this reflects an “overall downturn in the market” as savers chose to defer retirement.
The Pru says it will continue to work closely with the Government, regulators and other industry participants following the new pension freedoms set out in the Budget.
It says: “We anticipate a disruption to sales, which could be significant, in the individual annuities market as the industry works with all stakeholders to define the new pensions system.”
Corporate pensions sales dropped by 25 per cent in Q1 2014, from £53m to £40m, while onshore bond new business rose by 9 per cent from £45m to £49m.
Sales of other retail products, including individual pensions, PruProtect, PruHealth and offshore bonds, were up 22 per cent during the quarter, from £32m to £39m.