Interim results - Worldwide long-term savings new business – Three months to 31 March 2006
Continental Europe
Netherlands (including Germany, Belgium and Luxembourg):
Delta Lloyd’s total sales, including investment sales, were £856 million (2005: £925 million). The Dutch life insurance market was adversely affected in the first quarter by regulatory changes resulting in individuals needing to revise their healthcare insurance arrangements, and by fiscal changes removing some of the tax advantages of pre-retirement products.
Pension and annuity sales fell by 3% to £423 million (2005: £444 million). Delta Lloyd’s pension sales tend to fluctuate from quarter to quarter due to the timing and size of contracts; the first quarter of 2006 includes a premium from the Delta Lloyd pension scheme amounting to £125 million. Volumes of annuity sales were lower at £88 million (2005: £172 million), reflecting high volumes in the first quarter of 2005 from limited period special offers in ABN AMRO and the direct channel.
Life and savings sales were £299 million (2005: £389 million), with the reduction mainly due to lower sales in Germany and Belgium. In Germany, sales in the first quarter last year included a late influx of endowment sales following a change in tax law at the end of 2004. In Belgium, sales were lower following the introduction of a 1.1% insurance tax levy on life insurance premiums from 1 January 2006.
Investment sales increased by 48% to £134 million (2005: £92 million), benefiting from Delta Lloyd’s broad distribution network (including ABM AMRO and Rabobank), an attractive fund offering and buoyant equity markets. Sales momentum generated during 2005 was continued into the first quarter.
New business contribution was £19 million (2005: £18 million) with margins of 2.6% (2005: 2.2%). The 2005 margin was depressed by the low margin annuity sales in the first quarter last year which were not repeated in 2006. The 2006 margin incorporates the adverse impact of the 40 basis point decrease in the bond yield within the European Embedded Value assumptions at the end of 2005.
The Dutch market currently faces uncertainty due to the large amount of regulatory and fiscal change taking place. Delta Lloyd continues to focus on profitable growth for 2006.
