Prudential says it is continuing to tread cautiously in the UK insurance market after new business fell by 19 per cent last year to £607m in annual premium equivalent from £750m in 2002.
UK new business was only slightly ahead of the Pru's Asian operations, which reached £555m in 2003, up by 16 per cent from £478m in 2002.
Group chief executive Jonathan Bloomer says the Pru expects to gain from returning consumer confidence and a shift by savers towards companies with strong financial strength but it remains cautious about the prospects for 2004.
In the fourth quarter of 2003, UK insurance sales rose by 10 per cent to £148m from £134.5m in the third quarter on the back of strong with-profits bond and corporate pension sales.
Intermediary sales of the Pru with-profits bond leapt by a third from £14.5m in the third quarter to £19.2m in the final quarter of last year.
Fund management subsidiary M&G had gross fund inflows of £3.8bn last year, mostly from institutions, with only £1.2bn coming from the retail market. This was up slightly on £3.7bn of inflows in 2002. The fund house now manages £24.2bn in assets.
Bloomer says: “In the UK, we expect to benefit from savers choosing those companies with clear financial strength. However, while consumer confidence is returning, we remain relatively cautious for the UK in the first half of 2004 due to the uncertainty surrounding the continuing Government and regulatory review.”
Independent insurance analyst Ned Cazalet says: “It is a well known fact that the focus of the Pru in terms of organic growth has been Asia for some time. In the UK, the Pru has a pretty limited range of products compared with many of its rivals.”