Friends buoyed by pensions demand

Friends Provident today said first-quarter sales rose 12% after benefiting from “excellent momentum” in pensions sales.

The total new business figure of £1.5bn (€2.2bn) reflected a 30% rise in sales of group pensions, while the figure for individual pensions more than doubled.

Friends said protection business increased 8% on a year earlier, but the figure of £100m (€145m) was weaker than recent quarters, reflecting competition and flat demand from the mortgage-related protection market.

With the overall protection market expected to be flat this year, Friends said it would target areas where it is currently under-represented.

It predicted the group market pensions market will continue to be active, following year-on-year growth in first quarter sales to £598m (€875m).

Meanwhile, growth from quarter to quarter in individual pensions is expected to moderate as the impact of last year’s pensions A-Day reforms reduces.

New investment business, where the company has a lower share of the market, was down by 24% to £138m (€202m), partly reflecting the impact of a number of promotions from large providers during the quarter.

It launched a guaranteed bond product during the period, but Friends said it had taken to time to become established on major distributor product panels. It predicted that sales will start to pick up during the second quarter.

Ben Gunn, chief executive of Friends Provident Life and Pensions, said the protection market was key to the company’s plans during the year.

He added: “We expect this market to remain flat this year, although we will seek to take market share. In addition, it is expected that investment business will see improved performance in the second half of the year.”