Ark Life stays afloat after tough year

LIFE assurance and pensions provider Ark Life had a tougher year in 2002, impacted by the introduction of the Special Saving Incentive Accounts in February, 2001 which remained open to end April, 2002.

Billy Finn, managing director of Ark Life, an AIB subsidiary, described 2002 as a "challenging year" for the industry.

The beginning of the year was dominated by the close of the SSIA campaign, he said. As a result Ark Life's new savings in 2002 were down on 2001 and that was the main reason business declined in the year under review.

Figures released by the group yesterday show it wrote new business across all sectors totalling €179.2 million during the year.

That was down significantly on the 2001 figure of €200.4m for the reasons given by Mr Finn.

Now that people's savings needs have been met Mr Finn said the group saw a surge in basic protection policies for the remainder of the year. Life assurance and health protection plans rose by 37% over 2002.

During the year lump sum investments fell from €530m to €476m. Those figures mask the fact that Ark did well in the more difficult environment, undermined as it was by the continuing stock market falls during the period.

As a result its market share grew from 14% to 16% in the important market segment.

New regular premium business amounted to €136m against a figure of €147.4m for the previous year.

Combining all of the regular premium sales and 10% of the new Single Premium sales gives the industry norm for annual growth in business, called the Annual Premium Equivalent, or APE, for the group.

The results show that regular premium savings declined from €105.5m to €88.4m during the period.

Brian Woods, finance director of Ark Life, said this was an important part of the group's business overall and said it was clear the SSIAs had a major impact on that end of the market. In the pensions end of the market the amount of money invested was down also.

It fell from €30.9m to €28.3m and again reflected the lure of the SSIAs where Finance Minister Charlie McCreevy gave investors 1 for every 4 saved.

Mr Finnsaid this year will see the introduction of the Personal Retirement Savings Accounts, in a bid to win more people to take out private pensions. It will lead to the biggest upheaval the sector has ever seen, he said.

He warned the change in the pensions environment will lead to consolidation and he said Ark Life intended to be at the forefront in the provision of the new product.

"This is going to be a watershed and we will be in there as a lead provider," he said.

He predicted the PRSAs will be "the new war" in the financial services sector.