Hibernian L&P hit by 40% sales drop

NEW business sales at Hibernian Life & Pensions fell by 40% in the first nine months of the year as the closure of the Government’s SSIA sponsored saving scheme to new accounts hit sales.

Hibernian Life & Pensions, the third largest life and pensions provider in Ireland, is owned by Britain’s biggest insurer Aviva, where company-wide nine-month life and pensions sales were below expectations.

Hibernian Life & Pensions reported new business sales of £55m, a 40% year-on-year decline in local currency on an APE basis. Sales in 2002 benefited from regular premium sales of £23m of the Government’s Special Savings Incentive Account (SSIA) before its closure on 30 April 2002.

Despite the industry-wide fall in sales as a result of the choking of SSIA sales, Aviva said Hibernian increased its market share in the first half of 2003 to around 12%, reporting total sales of £167 million against £279 million in 2002.

Aviva said that its Norwich Union brand had regained its position as Britain’s market leader with a market share of around 12%.

The company said Hibernian continues to operate in “difficult market conditions”.

“We maintained our focus on pensions business, with strong sales of group pension products, offset by lower demand for individual pension products.

“New single premium pension sales were £82 million (2002: £78 million) and new regular premium pension sales were £32 million (2002: £32 million).

“A major pensions awareness campaign is being initiated by the (Irish) Government in the fourth quarter, however we expect this market to remain challenging in the short term,” parent company Aviva said in a statement yesterday.

The company said that in line with the market, sales of the Personal Retirement Savings Account (PRSA) have been initially slow.

“Awareness of the available products remains poor amongst both consumers and advisers.”

The company disclosed that life single premium sales were lower at £42 million (2002: £138 million), with continuing low demand for unit-linked and with-profit bond investments in current market conditions.

The company revealed they achieved a margin of 28.9%, full year 2002: 28.2%, on a new business contribution of £16 million, 2002: £23 million.

Aviva Group executive director Philip Scott said that there were signs consumers were returning to the savings market as shares recover from their savaging in the worst bear market in a generation.

“The indications are that equity markets are over the worst and investor confidence is slowly returning,” Mr Scott said in a conference call.

“We are cautiously optimistic for our outlook as we move into 2004,” he added.

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