Axa Sun Life's decision to withdraw from the life and pensions market due to what it saw as unsustainable price competition is responsible for the 1998 profits dip, according to analysts.
Insurance analyst Ned Cazalet says: "Sun Life withdrew as it felt the pricing had gone mad due to the pressure of competition, especially in pensions. It didn't want to write unprofitable business as it has a discipline for profitability.
"Looking ahead to 1999 when strength and security become more important Sun Life will do very well. It is a big player. And big companies may end up squeezing out smaller ones."