First-quarter new business nosedives in UK

Recession in the UK economy took a heavy toll on new life insurance business in the first quarter of 2009 with virtually all categories recording sharp year-on-year and quarter-on-quarter declines, reports the Association of British Insurers. Single premium accumulation and protection new business, traditionally the largest source of new premium income, came under significant pressure in the first quarter of 2009 Compared with the first quarter of 2008, new premium income slumped 43 percent from £16.8 billion ($27 billion) to £9.65 billion while compared with new business of £11.7 billion in the fourth quarter of 2008 the decline was 18 percent.

Single premium accumulation and protection new
business, traditionally the largest source of new premium income,
came under significant pressure in the first quarter of 2009.
Compared with the first quarter of 2008, new premium income slumped
43 percent from £16.8 billion ($27 billion) to £9.65 billion while
compared with new business of £11.7 billion in the fourth quarter
of 2008 the decline was 18 percent.

Within the single premium category the largest
decline was registered by individual protection products which saw
new business plunge by 81.7 percent from £276 million in the first
quarter of 2008 to £50 million.

In the largest sub-sector, savings and
investments, new business was down 58.3 percent at £3.03 billion
year-on-year and a still hefty 19.6 percent on a quarter-on-quarter
basis.

Single premium individual and occupational
pensions new business was also under pressure, registering a
year-on-year fall of 25.8 percent to £5.6 billion.

Sales in the regular premium income category
fared better than single premium sales, registering an overall
year-on-year decline of 8.3 percent to £1.24 billion.
Quarter-on-quarter sales were up by a marginal 1.6 percent.

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The only category to register year-on-year
growth was retirement income products with sales up a token 1.7
percent to £3.4 billion. Quarter-on-quarter sales were
unchanged.