Ark Life sees 2003 premium sales rise

INSURER Ark Life has reported a small rise in premium sales for 2003 after stripping out the effects of Government-backed special savings accounts from the previous year’s results.

Ark Life, which is owned by AIB, said annual premium equivalent (APE) sales in 2003 were €102.2 million, up a touch on the €99.9m sold in 2002. However, when SSIAs are added to the 2002 figures, APE sales fell from €162.1 million to €103.7m.

New regular premium sales were down from €114m to €56m, but this included a rise in pension sales from €28.3m to €29.7m.

Sales of single premium investments were flat at €475 million.

The company also said it was encouraged by the number of personal retirement savings accounts (PRSAs) it had sold during 2003.

Ark Life said of the total number sold it had 24% share of the market.

The company’s finance director Brian Woods said 2003 was a mixed year with an indifferent first six months leading to a stronger second half.

“The first half of 2003, because PRSAs were just introduced, was slow and we were at the pits of the stock market slump.

“Since then we have had the Baghdad bounce and the second half has shown brighter prospects.

“PRSAs have bedded down and people are beginning to invest again compared to what we saw in the first half,” said Mr Woods.

He added: “The APE market was up 17% in the second half of 2003 but we grew by 40% so we got our market share up.”

Commenting on the performance of SSIAs, Mr Woods said equity-based SSIAs were likely to be back above water due to the rise in world stock markets.

“At one stage last year nearly the whole of the government’s portion of the SSIA was lost; now they are breaking even and if the market behaves as it did at the end of last year and so far this year then the smart money is that equity-based SSIAs will win out.”

Ark Life, though, urged the Government to encourage SSIA holders to transfer their savings to pensions when the lifetime of the accounts end.

It said that pensions coverage in Ireland was still only at 50% and if we wanted to pay less tax in the future, more should be done to increase the take-up of pensions.

Practical ways to encourage this, the company said, would be through tax relief or a lump-sum pensions top-up for anyone who transfer their SSIA money into a pension.

“It would also act as a measure to protect against overheating in the economy and higher inflation as SSIA savings become available in 2006,” said Ark Life chief executive Billy Finn.