NU Worldwide New Long-Term Savings Business Figures: Year to 31 December 1999

Article date: 25 January 2000

Norwich Union has delivered an outstanding increase of 50% - to£630 million annual premium equivalent - in new worldwide life,pensions and investment business for 1999 (1998: £421 million).Strong growth in its UK, European and International businessesunderpin this excellent result.

Norwich Union group chief executive Richard Harvey said:

"This is a superb set of results, continuing the momentum of theprevious three quarters. In the UK growth of 46% has been achievedthrough our ongoing investment in distribution, product developmentand brand support. We increased our share of the expanding IFAmarket while substantially growing the contribution from otherdistribution channels. The continued focus on our key long-termsavings markets has paid off, with single premium bond salessurpassing £1 billion.

"Sales of investment products are also very encouraging, withIsa sales considerably ahead of those of Peps in 1998, showing thebenefits of our strong investment profile and our support forCat-standards.

"Results in Europe and International are at an unprecedentedlevel with sales up 58% in local currency. This impressive growthexcludes sales of our Navigator product which also experienced arecord year delivering sales of A$1.6 billion, up 37%. TheNavigator concept is being adapted for the European market and isdue to be launched in Italy next month, with sales in the UK andSpain following soon after."

United Kingdom (up 46%)

In a record year, Norwich Union's new long-term savings businessachieved successive quarter on quarter growth, and strongperformance across the product range. Sales in 1999 were up animpressive 46% at £412 million annual premium equivalent, from £283million in 1998.

Competitive pricing, a comprehensive product range, andfavourable economic conditions have resulted in outstanding singlepremium bond sales of £1,037 million, 165% ahead of 1998 (£392million). Average daily sales continued to accelerate during thefourth quarter at £5.7 million, an increase of 34% on the thirdquarter.

Group personal pensions sales have increased by 14% to £41million annual premium equivalent (£36 million), a good performancein the difficult market created by the impending introduction ofstakeholder pensions. Group pensions sales have increased by 31% to£44 million annual premium equivalent, which includes an increaseof 151% in investments in pooled managed pension funds to £153million (£61 million). Sales volumes of other pension products havebeen maintained. Norwich Union will continue to strengthen itsexisting stakeholder-friendly offering throughout 2000, and is wellpositioned for the launch of stakeholder pensions in 2001. Weexpect stakeholder to support the growth of defined contributionpension arrangements and we intend to exploit the opportunity toexpand market share in the more profitable segment of this marketrather than focus on a standardised price-driven stakeholderproduct.

Annuity sales have increased by 17% during 1999 to £775 million(£660 million), including £42 million in respect of with-profitannuities which commenced sales in August 1999.

Norwich Union is a leader in the creditor market following theacquisition of London & Edinburgh, with creditor life anddisability contributing £23 million annual premium equivalent,which is 6% of total UK sales (£6 million: 2%).

New investment funds business (Isas and Oeics) is up 296% to £27million annual premium equivalent (£7 million). The Higher IncomePlus fund launched in October 1999, has already attractedinvestments of £49 million and built on Norwich Union’ssuccessful Cat-standard Isa range.

Europe and International (up 58%)

Norwich Union’s annual premium equivalent new business inoverseas markets has grown by 58% (in local currency) to £218million.

  • Europe (up 62%)

European operations delivered impressive growth in long-termsavings new business of 62% (in local currency) to £134 millionannual premium equivalent. Regular premium new business rose by 77%(in local currency) to £99 million, while single premium newbusiness grew by 32% (in local currency) to £352 million.

Ireland delivered an outstanding increase of 53% (in localcurrency) in annual premium equivalent to £36 million, achievedthrough its established Celebration Bond product and theintroduction of property funds to support the Portfolio Bond.Strong unit-linked sales have boosted annual premium equivalent inFrance to £43 million (an increase of 11% in local currency) whiledifficult market conditions have adversely impacted annual premiumequivalent in Spain.

In March 1999 Norwich Union launched a new personal pensionbusiness in Poland. By the end of December 500,000 pension policyapplications had been received in the newly-privatised Polishmarket, placing Norwich Union amongst the leading players in thismarket with an estimated share of 6%. Norwich Union Poland hasrecognised £37 million of annual premium for this businessrepresenting the value of those policies where pension paymentshave been re-directed from the State scheme. Further annualpremiums will be recognised in 2000 as payments on the remainingpolicies are received.

  • International (up 52%)

Norwich Union’s continuing success in the Australian unittrust market and growing bond and pensions sales contributed to anincrease in International long-term savings new business of 52% (inlocal currency) to £83 million annual premium equivalent. Bolsteredby the acquisitions of leading fund management companies PortfolioPartners and Paladin, unit trust sales increased by 155% (in localcurrency) to £411 million.

Although not included in the new business figures, our Navigatorproduct in Australia has had its best year ever with recordcontributions for 1999 of A$1,586 million, up 37%, bringingassociated funds under administration to A$4.8 billion. Inaddition, wholesale fund mandate sales increased by 54% to A$1,383million reflecting the strong performance of Portfolio Partners andPaladin.

- Ends -

Analyst enquiries

  • Philip Scott, Chief Executive (UK Long-Term Savings) on 01603683936
  • Rebecca Burrows, Investor Relations & CorporateCommunications Director on 01603 680117

Media enquiries

  • James Duffell or Liz Maw on 01603 683820

Notes to Editors

New business figures have been translated at average exchangerates applying for the period.

1999

1998

Australia

£1 = A$2.5073

£1 = A$2.6392

France

£1 = FF9.9678

£1 = FF9.7701

Ireland

£1 = IR£1.1968

£1 = IR£1.1633

Poland

£1 = PLZ 6.4206

N/A

Spain

£1 = Pta252.8376

£1 = Pta247.4377


The new business results cover the year ended 31 December1999.

Annual premium equivalent (APE) is an industry standard forcalculating life, pensions and investment new business levels. Itis the total of new regular premiums plus 10% of singlepremiums.

Annual Premium Equivalent

12 months to 31.12.99 £m

12 months to 31.12.98 £m (at 1999 Exchange Rates)

12 months to 31.12.98 £m

United Kingdom

Regular

139.0

126.0

126.0

Single

245.6

149.7

149.7

384.6

275.7

275.7

Europe (excluding UK)

Regular

99.0

56.0

59.0

Single

35.1

26.2

26.8

134.1

82.2

85.8

International

Regular

17.0

15.0

14.0

Single

25.3

23.7

22.5

42.3

38.7

36.5

Total life and pensions

561.0

396.6

398.0

Unit trusts, Oeics, Peps and Isas

United Kingdom

27.3

6.9

6.9

Europe

0.1

0.4

0.4

International

41.1

16.1

15.3

Total long-term savings

629.5

420.0

420.6

UNAUDITED

Analysis of Worldwide New Business

Regular

Single

12 months to 31.12.99 £m

12 months to 31.12.98 £m

12 months to 31.12.99 £m

12 months to 31.12.98 £m

United Kingdom

Life

Unitised with-profit and unit-linked

15

13

1,037

392

Non-profit

29

21

33

6

44

34

1,070

398

Personal Pensions

Conventional with-profit

2

3

30

35

Unitised with-profit and unit-linked –individual

23

24

324

289

Unitised with-profit and unit-linked – group

39

34

24

23

Non-profit

-

1

1

2

64

62

379

349

Group Pensions

Conventional with-profit

8

8

3

3

Unitised with-profit and unit-linked

15

14

167

83

Non-profit

4

3

-

-

27

25

170

86

Annuities

-

-

775

660

Other

4

5

62

4

139

126

2,456

1,497

Europe (excluding UK)

Ireland

18

16

179

84

France

29

28

141

119

Spain

10

11

24

60

Poland

37

-

-

-

Other European Union

5

4

7

5

 

99

59

351

268

International

Australia

12

9

246

220

Other

5

5

7

5

17

14

253

225

Total life and pensions

255

199

3,060

1,990

Unit trusts and Oeics - UK

1

-

60

35

- Europe

-

-

1

4

- International

-

-

411

153

Personal Equity Plans and Isas

11

-

93

34

Total long-term savings

267

199

3,625

2,216

Analysis of UK long-term savings sales by distributionchannel

IFA - life and pensions products

115

116

2,309

1,458

- investment products

6

-

93

42

Direct - life and pensions products

24

10

147

39

- investment products

6

-

60

27

Total

151

126

2,609

1,566


UK unitised with-profit and unit-linked pension single premiumsshown above include DSS rebates of £83 million (£100 million).

New business premiums from Europe and International businesseshave been translated at the average exchange rates applying for theperiod. The impact of exchange rate movements in 1999 results inthe restatement of the 1998 total regular premiums from £199million to £197 million and from £2,216 million to £2,230 millionfor total single premiums.


Norwich Union only advises on its own products.

Norwich Union Life & Pensions Limited is regulated by thePersonal Investment Authority.

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