In a close race, Norwich Union (NU)
ousted rival insurer Prudential from the top position in the UK’s
equity release market in 2008. According to NU it achieved total
equity release sales of £249 million ($360 million), marginally
ahead of Prudential’s sales of £242 million.

NU’s equity release sales in 2008 were up
14.7 percent compared with sales of £217 million achieved in 2007.
The increase came against the background of a 9.5 percent fall in
total equity release sales in the UK in 2008 to £1.096 billion
reported by industry body Safe Home Income Plans (SHIP).

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The decline in total market sales in 2008
followed a period of very modest growth between 2003 and 2007.
During this period sales recorded a CAGR of 1.04 percent, rising
from £1.16 billion to £1.21 billion.

NU attributed its sales success in 2008 in
part to a “high-profile TV and online advertising campaign in the
summer of 2008” and a “significant product enhancement” launch in
August 2008.

Another key factor in NU’s sales growth in
2008 was a substantial increase in its market share of sales
through independent financial advisors (IFA) which increased from
6.5 percent in the first quarter of 2008 to 27 percent in the
fourth quarter. According to SHIP, IFA’s accounted for 63 percent
of equity product sales by number in 2008.

Direct sales accounted for the remaining 37
percent of sales. NU had a 47 percent share in this sector in the
fourth quarter of 2008, up from 36 percent in the first
quarter.

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Clearly aiming to capitalise on the strong
gains made in 2008, NU’s group product manager Dominic Fraser-Smith
noted: “We have already seen a strong start to 2009.”

A unit of UK insurer Aviva, NU will adopt the
Aviva brand name on 1 June 2009.