Norwich Union has continued to make outstanding progress during the first nine months of 1999. Strong growth has been achieved in its businesses both in the UK and internationally, and worldwide new business has risen by 50% to £450m annual premium equivalent (1998: £300m).
Norwich Union has continued to make outstanding progress during the first nine months of 1999. Strong growth has been achieved in its businesses both in the UK and internationally, and worldwide new business has risen by 50% to Ł450m annual premium equivalent (1998: Ł300m).
Norwich Union group chief executive Richard Harvey said: "These superb results reveal just how well Norwich Union has performed in its key long-term savings markets over the first nine months of 1999.
"In the UK we have achieved an impressive 41% growth in new business sales. Importantly, we have also seen our share of the IFA market increase while at the same time successfully growing our direct sales operation. This strong UK result was more than matched by a record performance from the overseas businesses, with sales in Europe and International up by 69%.
"We expect the group's out-performance to continue into the fourth quarter as we reap the benefits of our ongoing investment in distribution, product development and brand support".
United Kingdom (up 41%)
In a record quarter, Norwich Union's new long-term savings business continued its strong growth in the third quarter of 1999, with annual premium equivalent up 41% at Ł292m from Ł207m for the first nine months of 1998. This has been achieved by building on our strong relationships with IFAs and our growing direct operations.
Regular premium life and pensions sales grew by 14% to Ł105m (Ł92m), reflecting good performances across the board, particularly in creditor life and group personal pensions.
Single premium life and pensions sales increased by 55% to Ł1693m (Ł1095m). Sales of single premium bonds have reached Ł669m, which is 175% up on 1998 (Ł243m). Bond sales continued to accelerate during the third quarter, with average daily sales of Ł4.25m, an increase of 20% on the second quarter. Group pensions are up 47% at Ł103m (Ł70m) and annuity sales have increased by 13% to Ł585m (Ł518m), including sales of with-profit annuities which commenced in August. We remain fully confident that new product initiatives in the Isa market will continue to build on our profile as a leading Cat-standard provider.
Europe and International (up 69%)
Norwich Union's annual premium equivalent new business in Europe and International has grown by 69% (in local currency) to Ł158m.
• Europe
In Europe we have extended our first half performance with annual premium equivalent of Ł94m reflecting growth of 58% (in local currency). Single premium new business increased by 33% (in local currency) to Ł242m, with regular premium new business of Ł70m growing by 71% (in local currency).
We saw excellent growth in Ireland (annual premium equivalent up by 59% in local currency to Ł27m) where our with-profit bond sales, including the Celebration Bond product, have had continued success. In France, annual premium equivalent grew by 13% (in local currency), reflecting strong growth in our unit-linked product which has received a highly valued award from a leading personal investment publication. Difficult market conditions have caused the decline in single premium volumes in Spain.
By the end of September we had received 370,000 pension policy applications in the privatised market in Poland and we have recognised Ł22m of annual premium in respect of such business. This amount reflects the value of those policies where pension payments have been re-directed from the State scheme. Further annual premiums will be recognised as payments on the remaining policies are received.
• International
In Australia third quarter sales of bonds and pensions products have contributed to the outstanding growth of 95% (in local currency) in annual premium equivalent to Ł59m. This performance has been enhanced by the acquisitions of Portfolio Partners and Paladin.
Although not included as new business, sales of our Navigator product surpassed all previous performances with record quarter sales of A$450m. Year to date sales of A$1179m are up 36%, bringing total funds under administration to A$4.3bn. Also, wholesale fund mandate sales are up 105% to A$980m, reflecting the excellent performance of Portfolio Partners and Paladin.
Notes to Editors
New business figures have been translated at average exchange rates applying for the period.
| 1999 | 1998 | |
| Australia | Ł1 = A$2.4990 | Ł1 = A$2.6223 |
| France | Ł1 = FF9.8517 | Ł1 = FF9.9132 |
| Ireland | Ł1 = IRŁ1.1829 | Ł1 = IRŁ1.1779 |
| Poland | Ł1 = Zloty6.2922 | - |
| Spain | Ł1 = Pta249.8933 | Ł1 = Pta250.9539 |
Annual premium equivalent is an industry standard for calculating life, pensions and investments new business levels. It is the total of new regular premiums plus 10 per cent of single premiums.
| Annual Premium Equivalent | ||
| 9 months o 30.9.99 | 9 months to 30.9.98 | 9 months to 30.9.98 |
| Łm | Łm | Łm |
| (at 1999 Exchange Rates) | ||
| United Kingdom | |||
| Regular | 105.0 | 92.0 | 92.0 |
| Single | 169.3 | 109.5 | 109.5 |
| 274.3 | 201.5 | 201.5 | |
| Europe (excluding UK) | |||
| Regular | 70.0 | 41.0 | 42.0 |
| Single | 24.2 | 18.2 | 18.1 |
| 94.2 | 59.2 | 60.1 | |
| International | |||
| Regular | 16.0 | 11.0 | 10.0 |
| Single | 19.3 | 14.1 | 13.5 |
| 35.3 | 25.1 | 23.5 | |
| Total life and pensions | 403.8 | 285.8 | 285.1 |
| Unit trusts, Oeics, Peps and Isas | |||
| United Kingdom | 17.5 | 5.8 | 5.8 |
| Europe | 0.1 | 0.4 | 0.4 |
| International | 28.7 | 8.7 | 8.3 |
| Total long-term savings | 450.1 | 300.7 | 299.6 |
| Unaudited | ||||
| Analysis of Worldwide New Business | ||||
| Regular | Single | |||
| 9 months to 30.9.99 Łm | 9 months to 30.9.98 Łm | 9 months to 30.9.99 Łm | 9 months to 30.9.98 Łm | |
| United Kingdom | ||||
| Life | ||||
| Unitised with-profit and unit-linked | 12 | 9 | 669 | 243 |
| Non-profit | 21 | 15 | 18 | 3 |
| 33 | 24 | 687 | 246 | |
| Personal Pensions | ||||
| Conventional with-profit | 2 | 3 | 20 | 27 |
| Unitised with-profit and unit-linked - individual | 18 | 18 | 240 | 214 |
| Unitised with-profit and unit-linked - group | 29 | 24 | 17 | 19 |
| Non-profit | - | 1 | 1 | 1 |
| 49 | 46 | 278 | 261 | |
| Group Pensions | ||||
| Conventional with-profit | 7 | 6 | 3 | 5 |
| Unitised with-profit and unit-linked | 11 | 11 | 100 | 65 |
| Non-profit | 2 | 2 | - | - |
| 20 | 19 | 103 | 70 | |
| Annuities | - | - | 585 | 518 |
| Other | 3 | 3 | 40 | - |
| 105 | 92 | 1,693 | 1,095 | |
| Europe (excluding UK) | ||||
| Ireland | 15 | 13 | 123 | 52 |
| France | 22 | 20 | 100 | 82 |
| Spain | 7 | 6 | 15 | 44 |
| Poland | 22 | - | - | - |
| Other European Union | 4 | 3 | 4 | 3 |
| 70 | 42 | 242 | 181 | |
| International | ||||
| Australia | 12 | 7 | 187 | 131 |
| Other | 4 | 3 | 6 | 4 |
| 16 | 10 | 193 | 135 | |
| Total life and pensions | 191 | 144 | 2,128 | 1,411 |
| Unit trusts and Oeics - UK | 1 | - | 36 | 28 |
| - Europe | - | - | 1 | 4 |
| - International | 9 | - | 39 | 30 |
| Personal Equity Plans and Isas | 9 | - | 39 | 30 |
| Total long-term savings | 201 | 144 | 2,491 | 1,556 |
| Analysis of UK long-term savings sales by distribution channel | ||||
| IFA - life and pensions products | 88 | 85 | 1,600 | 1,065 |
| - investment products | 4 | - | 50 | 34 |
| Direct - life and pensions products | 17 | 7 | 93 | 30 |
| - investment products | 6 | - | 25 | 24 |
| Total | 115 | 92 | 1,768 | 1,153 |
UK unitised with-profit and unit-linked pension single premiums shown above include DSS rebates of Ł48m (1998: Ł74m) of which Łnil (1998: Ł60m) is an accrual in respect of delayed payments due from the Contributions Agency.
New business premiums from Europe and International businesses have been translated at the average exchange rates applying for the period. The impact of exchange rate movements in 1999 results in the restatement of the 1998 total single premiums from Ł1556m to Ł1567m. Exchange rate movements do not affect the 1998 total regular premiums of Ł144m.