Prudential has reported an 8 per cent increase in total UK sales of £617m for the first nine months of the year, driven by individual annuities, with-profits bonds and bulk annuities.
But the insurer has warned of “short-term dislocation in the market” ahead of the RDR, and predicts bond sales will take a hit in the latter part of this year and into next year.
Pru’s Q3 interim statement, published today, shows new business profit is up 17 per cent to £227m, compared with £194m at the same time last year.
Individual annuity sales on an APE basis rose 25 per cent to £166m. Of the total individual annuity sales, £104m came from internal vestings which were 18 per cent higher than last year, due to a higher number of customers retiring and higher average fund values.
Sales of external annuities of £62m were 41 per cent higher than the same time last year.
Onshore bond sales of £161m increased 27 per cent on the same period in 2011, including with-profits bond sales of £152m, a rise of 36 per cent from last year.
The PruFund range made up 76 per cent of with-profits bond sales. Pru attributes the performance of the PruFund range to the optional guarantees features, but says sales may also have been driven by the RDR in the run-up to the ban on commission.
Pru says: “Distributors are adjusting their business models ahead of the implementation of the new regulatory framework. This is likely to lead to some short-term dislocation in the market.
“While our business is on track to be ready for the onset of RDR, we expect investment bond sales in particular to be impacted in the latter part of 2012 and into 2013 as distributors adapt to the new regulatory environment.”
Corporate pension sales of £148m in the first nine months of the year were 22 per cent lower than the same period last year.
Pru says sales last year were pushed up by new defined contribution members joining their schemes following the closure of a number of defined benefit schemes operated by existing clients.
Other product sales, including individual pensions, PruProtect, PruHealth and offshore bonds totalled £101m, 11 per cent higher than the same time last year.
Individual pensions sales including income drawdown of £59m rose 9 per cent from last year.
M&G, Pru’s asset management arm, has seen inflows rise 329 per cent to £11.3bn during the first nine months of the year, up from £2.6bn for the same period in 2011.