Italy
Total new business sales were £1,049 million (2003: £1,092 million), including lower single premium one-off direct business of £82 million (2003: £187 million). Sales momentum was maintained at a similar level to the second quarter during the normally slower summer period, resulting in underlying growth in total sales of 9%, after excluding the impact of one-off business. This performance compares favourably to a flat Italian new business market in the first eight months of 2004, reflecting investor caution.
Sales through UniCredito Italiano (UCI) were lower at £503 million (2003: £607 million), reflecting more difficult trading conditions for savings products and a challenging comparative, given the concentration of marketing campaigns in the first half of 2003. Sales in the third quarter were helped by increased distribution of products through Xelion, the financial adviser network of UCI, and new product launches which will continue into the fourth quarter of 2004.
Our most recent agreement with Banca Popolare Commercio e Industria, now part of Banche Popolari Unite (BPU), achieved strong growth with total sales of £190 million (2003: £68 million). Sales benefited from the continued success of limited offers on structured investment bonds. Regular premium unit-linked, protection and individual pension plan products will be introduced in the fourth quarter to broaden the product range. We look forward to reaping the benefits of the extension of our agreement with BPU to a further 380 branches, with sales expected from the start of 2005.
Total sales from Banca Popolare di Lodi Group were higher at £213 million (2003: £189 million) and sales through Banca delle Marche were higher at £49 million (2003: £29 million). Both partners launched limited offer campaigns earlier in the year on structured investment bonds that boosted sales in the third quarter. Further limited offers are planned for the fourth quarter.
We continue to develop our strong partnerships across Italy and work with our partners to market a range of products to meet our customers’ needs. Our long-term growth potential remains strong, although the timing of marketing campaigns and product launches which vary throughout the year result in some volatility in sales levels each quarter.
New business contribution amounted to £31 million (2003: £35 million), with margins of 23.3% (full year 2003: 23.2%).
