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.
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.
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.