Personal Pension  

Zurich’s results hit by reduced UK sales

Zurich has reported operating profits $2.3bn (£1.47bn) for the first half of 2013, down from the $2.5bn (£1.6bn) for the start of 2012.

In its results, published today (15 August) Zurich revealed that UK life new business profits after tax were $94m (£60.46m) compared with $98m (£63.04m) at the end of 2012 but globally the insurer saw the amount of business it was doing with financial advisers increase.

New life business, after tax, from IFAs, stood at $131m (£84.27m) for the first half of 2013 compared with $105m (£67.54m) at the end of last year.

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In corporate life and pensions, new business value increased by $35m (£22.51m) to $171m (£109.9m), which Zurich stated was due to higher margin corporate protection business in Europe.

Overall Zurich stated on an annual premium equivalent this type of business was largely flat with the growth in the protection business offset by lower volumes of lower margin corporate pension business in the UK.

Zurich’s UK Life half year results revealed a business operating profit 39 per cent down to £60m compared with the first half of 2012, which bosses said was largely due to ‘one-off’ reserving benefits experienced a year ago which have not been repeated in 2013.

New business value (NBV) was steady at £61m (down 2 per cent).

Annual premium equivalent (APE) business was £252m, down by 33 per cent.

The figures were put down to the impact of the Retail Distribution Review on retail bond business with lower levels of single premium private banking client solutions and reduced volumes so far from corporate savings (ZCS) business.

Gary Shaughnessy, UK life chief executive of Zurich, said: “The biggest success story of these results is the continued growth of our individual and corporate protection businesses as shown by the rise in our new business margin.

“Our market share in individual protection has reached double figures for the first time, continuing the growth we have seen over the last few years and our group risk business has become the market leader in group life new business.

“This success has been achieved despite the difficult market conditions which have seen the protection market shrink.

“Initial growth from our retail platform launch is further reinforcing our figures and we’re very pleased with the increasing number of advisers using the platform. At the same time, the level of assets moving onto our retail platform has increased.

“Our corporate savings business has maintained its momentum with a pipeline of schemes soon to come on board, and recently we were re-confirmed by Mercer as one of their preferred suppliers for workplace savings.

“Given the continuing tough economic conditions and unprecedented regulatory change, we still have a lot of work to do to maintain this momentum in both the retail advisory and corporate markets - we expect the market landscape to continue to change substantially over the next few years.