Article date: 19 October 1999
Norwich Union has continued to make outstanding progress duringthe first nine months of 1999. Strong growth has been achieved inits businesses both in the UK and internationally, and worldwidenew business has risen by 50% to £450m annual premium equivalent(1998: £300m).
Norwich Union group chief executive Richard Harvey said: "Thesesuperb results reveal just how well Norwich Union has performed inits key long-term savings markets over the first nine months of1999.
"In the UK we have achieved an impressive 41% growth in newbusiness sales. Importantly, we have also seen our share of the IFAmarket increase while at the same time successfully growing ourdirect sales operation. This strong UK result was more than matchedby a record performance from the overseas businesses, with sales inEurope and International up by 69%.
"We expect the group's out-performance to continue into thefourth quarter as we reap the benefits of our ongoing investment indistribution, product development and brand support".
United Kingdom (up 41%)
In a record quarter, Norwich Union's new long-term savingsbusiness continued its strong growth in the third quarter of 1999,with annual premium equivalent up 41% at £292m from £207m for thefirst nine months of 1998. This has been achieved by building onour strong relationships with IFAs and our growing directoperations.
Regular premium life and pensions sales grew by 14% to £105m(£92m), reflecting good performances across the board, particularlyin creditor life and group personal pensions.
Single premium life and pensions sales increased by 55% to£1693m (£1095m). Sales of single premium bonds have reached £669m,which is 175% up on 1998 (£243m). Bond sales continued toaccelerate during the third quarter, with average daily sales of£4.25m, an increase of 20% on the second quarter. Group pensionsare up 47% at £103m (£70m) and annuity sales have increased by 13%to £585m (£518m), including sales of with-profit annuities whichcommenced in August. We remain fully confident that new productinitiatives in the Isa market will continue to build on our profileas a leading Cat-standard provider.
Europe and International (up 69%)
Norwich Union's annual premium equivalent new business in Europeand International has grown by 69% (in local currency) to£158m.
In Europe we have extended our first half performance withannual premium equivalent of £94m reflecting growth of 58% (inlocal currency). Single premium new business increased by 33% (inlocal currency) to £242m, with regular premium new business of £70mgrowing by 71% (in local currency).
We saw excellent growth in Ireland (annual premium equivalent upby 59% in local currency to £27m) where our with-profit bond sales,including the Celebration Bond product, have had continued success.In France, annual premium equivalent grew by 13% (in localcurrency), reflecting strong growth in our unit-linked productwhich has received a highly valued award from a leading personalinvestment publication. Difficult market conditions have caused thedecline in single premium volumes in Spain.
By the end of September we had received 370,000 pension policyapplications in the privatised market in Poland and we haverecognised £22m of annual premium in respect of such business. Thisamount reflects the value of those policies where pension paymentshave been re-directed from the State scheme. Further annualpremiums will be recognised as payments on the remaining policiesare received.
In Australia third quarter sales of bonds and pensions productshave contributed to the outstanding growth of 95% (in localcurrency) in annual premium equivalent to £59m. This performancehas been enhanced by the acquisitions of Portfolio Partners andPaladin.
Although not included as new business, sales of our Navigatorproduct surpassed all previous performances with record quartersales of A$450m. Year to date sales of A$1179m are up 36%, bringingtotal funds under administration to A$4.3bn. Also, wholesale fundmandate sales are up 105% to A$980m, reflecting the excellentperformance of Portfolio Partners and Paladin.
Notes to Editors
New business figures have been translated at average exchangerates applying for the period.
|Australia||£1 = A$2.4990||£1 = A$2.6223|
|France||£1 = FF9.8517||£1 = FF9.9132|
|Ireland||£1 = IR£1.1829||£1 = IR£1.1779|
|Poland||£1 = Zloty6.2922||-|
|Spain||£1 = Pta249.8933||£1 = Pta250.9539|
Annual premium equivalent is an industry standard forcalculating life, pensions and investments new business levels. Itis the total of new regular premiums plus 10 per cent of singlepremiums.
|Annual Premium Equivalent|
|(at 1999 Exchange Rates)|
|Europe (excluding UK)|
|Total life and pensions||403.8||285.8||285.1|
|Unit trusts, Oeics, Peps and Isas|
|Total long-term savings||450.1||300.7||299.6|
|Analysis of Worldwide New Business|
|Unitised with-profit and unit-linked||12||9||669||243|
|Unitised with-profit and unit-linked -|
|Unitised with-profit and unit-linked -|
|Unitised with-profit and unit-linked||11||11||100||65|
|Other European Union||4||3||4||3|
|Total life and pensions||191||144||2,128||1,411|
|Unit trusts and|
Oeics - UK
|Personal Equity Plans and Isas||9||-||39||30|
|Total long-term savings||201||144||2,491||1,556|
|Analysis of UK long-term savingssales by distribution channel|
|IFA - life and pensions products||88||85||1,600||1,065|
|- investment products||4||-||50||34|
|Direct - life and pensions products||17||7||93||30|
|- investment products||6||-||25||24|
UK unitised with-profit and unit-linked pension single premiumsshown above include DSS rebates of £48m (1998: £74m) of which £nil(1998: £60m) is an accrual in respect of delayed payments due fromthe Contributions Agency.
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 single premiums from £1556m to£1567m. Exchange rate movements do not affect the 1998 totalregular premiums of £144m.