Norwich Union has delivered an outstanding increase of 50% - to £630 million annual premium equivalent - in new worldwide life, pensions and investment business for 1999 (1998: £421 million). Strong growth in its UK, European and International businesses underpin this excellent result.
Norwich Union has delivered an outstanding increase of 50% - to Ł630 million annual premium equivalent - in new worldwide life, pensions and investment business for 1999 (1998: Ł421 million). Strong growth in its UK, European and International businesses underpin this excellent result.
Norwich Union group chief executive Richard Harvey said:
"This is a superb set of results, continuing the momentum of the previous three quarters. In the UK growth of 46% has been achieved through our ongoing investment in distribution, product development and brand support. We increased our share of the expanding IFA market while substantially growing the contribution from other distribution channels. The continued focus on our key long-term savings markets has paid off, with single premium bond sales surpassing Ł1 billion.
"Sales of investment products are also very encouraging, with Isa sales considerably ahead of those of Peps in 1998, showing the benefits of our strong investment profile and our support for Cat-standards.
"Results in Europe and International are at an unprecedented level with sales up 58% in local currency. This impressive growth excludes sales of our Navigator product which also experienced a record year delivering sales of A$1.6 billion, up 37%. The Navigator concept is being adapted for the European market and is due to be launched in Italy next month, with sales in the UK and Spain following soon after."
United Kingdom (up 46%)
In a record year, Norwich Union's new long-term savings business achieved successive quarter on quarter growth, and strong performance across the product range. Sales in 1999 were up an impressive 46% at Ł412 million annual premium equivalent, from Ł283 million in 1998.
Competitive pricing, a comprehensive product range, and favourable economic conditions have resulted in outstanding single premium bond sales of Ł1,037 million, 165% ahead of 1998 (Ł392 million). Average daily sales continued to accelerate during the fourth quarter at Ł5.7 million, an increase of 34% on the third quarter.
Group personal pensions sales have increased by 14% to Ł41 million annual premium equivalent (Ł36 million), a good performance in the difficult market created by the impending introduction of stakeholder pensions. Group pensions sales have increased by 31% to Ł44 million annual premium equivalent, which includes an increase of 151% in investments in pooled managed pension funds to Ł153 million (Ł61 million). Sales volumes of other pension products have been maintained. Norwich Union will continue to strengthen its existing stakeholder-friendly offering throughout 2000, and is well positioned for the launch of stakeholder pensions in 2001. We expect stakeholder to support the growth of defined contribution pension arrangements and we intend to exploit the opportunity to expand market share in the more profitable segment of this market rather than focus on a standardised price-driven stakeholder product.
Annuity sales have increased by 17% during 1999 to Ł775 million (Ł660 million), including Ł42 million in respect of with-profit annuities which commenced sales in August 1999.
Norwich Union is a leader in the creditor market following the acquisition of London & Edinburgh, with creditor life and disability contributing Ł23 million annual premium equivalent, which is 6% of total UK sales (Ł6 million: 2%).
New investment funds business (Isas and Oeics) is up 296% to Ł27 million annual premium equivalent (Ł7 million). The Higher Income Plus fund launched in October 1999, has already attracted investments of Ł49 million and built on Norwich Union’s successful Cat-standard Isa range.
Europe and International (up 58%)
Norwich Union’s annual premium equivalent new business in overseas markets has grown by 58% (in local currency) to Ł218 million.
- Europe (up 62%)
European operations delivered impressive growth in long-term savings new business of 62% (in local currency) to Ł134 million annual premium equivalent. Regular premium new business rose by 77% (in local currency) to Ł99 million, while single premium new business grew by 32% (in local currency) to Ł352 million.
Ireland delivered an outstanding increase of 53% (in local currency) in annual premium equivalent to Ł36 million, achieved through its established Celebration Bond product and the introduction of property funds to support the Portfolio Bond. Strong unit-linked sales have boosted annual premium equivalent in France to Ł43 million (an increase of 11% in local currency) while difficult market conditions have adversely impacted annual premium equivalent in Spain.
In March 1999 Norwich Union launched a new personal pension business in Poland. By the end of December 500,000 pension policy applications had been received in the newly-privatised Polish market, placing Norwich Union amongst the leading players in this market with an estimated share of 6%. Norwich Union Poland has recognised Ł37 million of annual premium for this business representing the value of those policies where pension payments have been re-directed from the State scheme. Further annual premiums will be recognised in 2000 as payments on the remaining policies are received.
- International (up 52%)
Norwich Union’s continuing success in the Australian unit trust market and growing bond and pensions sales contributed to an increase in International long-term savings new business of 52% (in local currency) to Ł83 million annual premium equivalent. Bolstered by the acquisitions of leading fund management companies Portfolio Partners and Paladin, unit trust sales increased by 155% (in local currency) to Ł411 million.
Although not included in the new business figures, our Navigator product in Australia has had its best year ever with record contributions for 1999 of A$1,586 million, up 37%, bringing associated funds under administration to A$4.8 billion. In addition, wholesale fund mandate sales increased by 54% to A$1,383 million reflecting the strong performance of Portfolio Partners and Paladin.
- Ends -
Analyst enquiries
- Philip Scott, Chief Executive (UK Long-Term Savings) on 01603 683936
- Rebecca Burrows, Investor Relations & Corporate Communications Director on 01603 680117
Media enquiries
- James Duffell or Liz Maw on 01603 683820
Notes to Editors
New business figures have been translated at average exchange rates applying for the period.
| 1999 | 1998 | |
| Australia | Ł1 = A$2.5073 | Ł1 = A$2.6392 |
| France | Ł1 = FF9.9678 | Ł1 = FF9.7701 |
| Ireland | Ł1 = IRŁ1.1968 | Ł1 = IRŁ1.1633 |
| Poland | Ł1 = PLZ 6.4206 | N/A |
| Spain | Ł1 = Pta252.8376 | Ł1 = Pta247.4377 |
The new business results cover the year ended 31 December 1999.
Annual premium equivalent (APE) is an industry standard for calculating life, pensions and investment new business levels. It is the total of new regular premiums plus 10% of single premiums.
| Annual Premium Equivalent | ||||
| 12 months to 31.12.99 Łm | 12 months to 31.12.98 Łm (at 1999 Exchange Rates) | 12 months to 31.12.98 Łm | ||
| United Kingdom | ||||
| Regular | 139.0 | 126.0 | 126.0 | |
| Single | 245.6 | 149.7 | 149.7 | |
| 384.6 | 275.7 | 275.7 | ||
| Europe (excluding UK) | ||||
| Regular | 99.0 | 56.0 | 59.0 | |
| Single | 35.1 | 26.2 | 26.8 | |
| 134.1 | 82.2 | 85.8 | ||
| International | ||||
| Regular | 17.0 | 15.0 | 14.0 | |
| Single | 25.3 | 23.7 | 22.5 | |
| 42.3 | 38.7 | 36.5 | ||
| Total life and pensions | 561.0 | 396.6 | 398.0 | |
| Unit trusts, Oeics, Peps and Isas | ||||
| United Kingdom | 27.3 | 6.9 | 6.9 | |
| Europe | 0.1 | 0.4 | 0.4 | |
| International | 41.1 | 16.1 | 15.3 | |
| Total long-term savings | 629.5 | 420.0 | 420.6 | |
UNAUDITED
Analysis of Worldwide New Business
| Regular | Single | |||
| 12 months to 31.12.99 Łm | 12 months to 31.12.98 Łm | 12 months to 31.12.99 Łm | 12 months to 31.12.98 Łm | |
| United Kingdom | ||||
| Life | ||||
| Unitised with-profit and unit-linked | 15 | 13 | 1,037 | 392 |
| Non-profit | 29 | 21 | 33 | 6 |
| 44 | 34 | 1,070 | 398 | |
| Personal Pensions | ||||
| Conventional with-profit | 2 | 3 | 30 | 35 |
| Unitised with-profit and unit-linked –individual | 23 | 24 | 324 | 289 |
| Unitised with-profit and unit-linked – group | 39 | 34 | 24 | 23 |
| Non-profit | - | 1 | 1 | 2 |
| 64 | 62 | 379 | 349 | |
| Group Pensions | ||||
| Conventional with-profit | 8 | 8 | 3 | 3 |
| Unitised with-profit and unit-linked | 15 | 14 | 167 | 83 |
| Non-profit | 4 | 3 | - | - |
| 27 | 25 | 170 | 86 | |
| Annuities | - | - | 775 | 660 |
| Other | 4 | 5 | 62 | 4 |
| 139 | 126 | 2,456 | 1,497 | |
| Europe (excluding UK) | ||||
| Ireland | 18 | 16 | 179 | 84 |
| France | 29 | 28 | 141 | 119 |
| Spain | 10 | 11 | 24 | 60 |
| Poland | 37 | - | - | - |
| Other European Union | 5 | 4 | 7 | 5 |
| 99 | 59 | 351 | 268 | |
| International | ||||
| Australia | 12 | 9 | 246 | 220 |
| Other | 5 | 5 | 7 | 5 |
| 17 | 14 | 253 | 225 | |
| Total life and pensions | 255 | 199 | 3,060 | 1,990 |
| Unit trusts and Oeics - UK | 1 | - | 60 | 35 |
| - Europe | - | - | 1 | 4 |
| - International | - | - | 411 | 153 |
| Personal Equity Plans and Isas | 11 | - | 93 | 34 |
| Total long-term savings | 267 | 199 | 3,625 | 2,216 |
Analysis of UK long-term savings sales by distribution channel
| IFA - life and pensions products | 115 | 116 | 2,309 | 1,458 |
| - investment products | 6 | - | 93 | 42 |
| Direct - life and pensions products | 24 | 10 | 147 | 39 |
| - investment products | 6 | - | 60 | 27 |
| Total | 151 | 126 | 2,609 | 1,566 |
UK unitised with-profit and unit-linked pension single premiums shown above include DSS rebates of Ł83 million (Ł100 million).
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 regular premiums from Ł199 million to Ł197 million and from Ł2,216 million to Ł2,230 million for total single premiums.
Norwich Union only advises on its own products.
Norwich Union Life & Pensions Limited is regulated by the Personal Investment Authority.