Zurich UK Life chief executive Gary Shaughnessy insists he is not worried about the insurer’s performance despite posting a 39 per cent fall in operating profit during the first half of the year.
Earlier today, Zurich reported a £38m drop in half-year profits for its UK life business, down from £98m last year to £60m this year.
The provider’s sales were also down by a third year on year, from £376m during the first half of last year to £252m this year.
Shaughnessy says this reflects a drop in retail bond business as a result of the RDR and lower volumes in its corporate savings business.
He also says the profit figure for the first half of last year was skewed by “one-off reserving benefits” which have not been repeated this year.
Shaughnessy says: “A core focus for us has been building our protection business. Underneath these numbers our protection business, both in the individual market and the group market, is going really well.
“In individual protection our market share is above 10 per cent and we are now number one in the UK for group life.
“Our corporate business volumes have not been as strong as the first half of last year, but that is very lumpy business. We expect our corporate savings numbers for the next six months to be a lot more positive relative to last year.
“In terms of sales, against what we set out to do, this is what we were expecting and it is the right mix of business.”
Shaughnessy is bullish about the future prospects for the UK protection market, although the provider was unable to provide a breakdown of its sales for the first half of 2013.
He says: “We are starting to see the protection market benefiting from the increase in house purchases in the UK.
“Whereas in the first quarter that market was very subdued, we are seeing better signs of life there.”
Shaughnessy also points to the development of both its corporate and retail platforms as reasons to be positive about the future of the Swiss-based provider’s UK arm.
“Ahead of the RDR we had a large position in the retail bond market,” he says.
“That market has generally declined and we have been focused on building our platform business. It is early days but so far it is running pretty much exactly to plan.
“We are getting good traction from advisers and starting to bring some reasonably strong assets on.”
Shaughnessy says Zurich will publish both assets under administration and adviser numbers for its platform business in autumn this year.