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Pru retail sales are up but domestic business falls

Prudential delivered a mixed set of interim results, with double-digit growth in UK retail sales offset by a fall in the wider group’s domestic business.

The firm reports that UK retail annual-premium equivalent sales increased by 11 per cent to £485m over the first nine months of the year compared with 2005. This was buoyed by an upturn in with-profits and pension inflows.

However, total APE sales across Prudential’s UK ins-urance business fell 4 per cent from £692m to £664m on the back of a drop-off in sales in the bulk annuity market.

UK chief executive Nick Prettejohn points to a 29 per cent growth in with-profits bond sales and 127 per cent growth in with-profit annuities as evidence that there is still demand for the product although he admits this level of growth is unlikely to be sustainable.

APE corporate pension sales were up by 23 per cent on last year. Individual pension sales increased by a more modest 8 per cent, with Pru late to market with its Sipp, launched in August.

Pru says persistency rates across its pension products remain unchanged, unlike rivals Standard Life and Norwich Union, which have both had to reserve tens of millions of pounds to off- set this.

No figures were released on the group’s equity-release sales but Prettejohn expects this to be an area of strong growth for Pru, which is currently training a specialist sales team.

On a less positive note, Prettejohn admits the mar- ket for bulk annuities and closed books of business is becoming increasingly competitive, driving down margins.

Internet banking subsid-iary Egg also reported fur- ther losses after an increase in exposure to bad debts.

He says: “We continue to see good levels of growth in the right areas and will not chase price and growth for growth’s sake if it des- troys value.”

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