Pensions help Zurich Life’s operating profit to rise 35%
New business for the first half of the year increased by 13% to €74.3m. Much of the increased demand came from the pensions business.
“The pensions landscape in Ireland is undergoing significant change, with many pension schemes restructuring and moving away from traditional defined benefit arrangements. In this environment, it is vital that the Government continues to support and encourage pension savings to avoid a future pension crisis for the current Irish workforce,” said chief executive of Zurich Ireland, Anthony Brennan.
“It is also important that the Life industry plays its part by clearly explaining the real value of saving for retirement, providing products that give consistent value for money and making retirement planning easier.”
Zurich’s group risk market, which refers to life assurance and income protection schemes provided by an employer on behalf of their employees, saw revenue increase by 13% to €3.1m. The firm has a 16% share of the Irish market and has €13.9bn of funds under management of which €7.6bn are pensions.
Goodbody Stockbroker analyst Eamon Hughes said Zurich’s results, as well as Bank of Ireland’s recent results and retention of its life sector, indicate a positive trend: “The results from Zurich show some positive trends in the domestic market in terms of new business momentum, though margins were slightly tighter. These results follow interims from Bank of Ireland (BoI) earlier in August.
“Sales at BoI were up 5% in H1 with flat new business profit on an embedded value basis. Operating profit improved by 5% on an embedded value basis.
“The results from Zurich, as well as the BoI results, indicate some positive momentum in new business sales in the domestic market. The recent ruling by the EU that BoI can retain its life company under the updated restructuring plan, means this business will play a larger part in the group’s return to profitability.”
Earlier this year Irish Life was sold to Canada’s Great-West Lifeco for €1.3bn. Last month the European Commission allowed BoI to retain New Ireland. The bank had agreed to sell the insurance division as part of a deleveraging plan in 2011.
