Zurich UK Life saw business operating profit down 17 per cent during the first half of this year to £55m compared to the same period last year, blamed on one-off costs and lower bond yields.
The new business margin of 13.7 per cent was also down on the first half of 2014 by 1.2 percentage points, reflecting the current mix of business which was characterised by higher volumes of lower margin savings business and steady volume growth across higher margin protection business.
New business value of £64m, represented an increase of 23 per cent year-on-year though, with growth in protection and savings businesses in both corporate and retail markets.
The results stated that protection volumes are up, particularly in the group market, along with rising corporate savings growth, although this is “naturally lumpy”.
Gary Shaughnessy, chief executive for Zurich’s UK Life business, welcomed the profitable growth, despite headwinds caused by low UK yields and turbulent global markets.
“We expect the economic environment to remain challenging but as these results show, we are well placed to handle this.
“In particular, our retail savings platform is maturing well, while our corporate protection business has also performed very strongly, growing in the group income protection market as well as continuing to increase our share of the group life market.”
During the first six months of the year the business also announced a transfer worth £1.2bn of its annuity back book, with Mr Shaughnessy noting that only a limited amount of the benefits from this transaction have been reflected in financial figures at this stage.
In the wider group’s results, the group chief executive Martin Senn commented on Zurich’s admission late last month that it was considering a bid for general insurance group RSA.
“We believe that a transaction could bring significant benefits to us and to our investors in terms of the complementary fit of RSA’s business with our own operations and in financial terms. But any capital deployment would need to meet the same hurdles that we apply to any other investment.”
peter.walker@ft.com
