New business figures for 1997 from Friends Provident and Canada Life show strong growth in premium income. Friends Provident (part of the Eureko Ireland Group) reported a 57 per cent rise in annual premium-equivalent income (an industry measure of new business made up of annual premiums plus 10 per cent of lumpsum premiums) while Canada Life reported a rise of 36 per cent.
Single-premium or lump-sum income at Friends Provident rose by 112 per cent to £155.3 million while annual or regular-premium income was 24 per cent higher at £15.2 million.
Friends Provident produced the highest percentage annual premium-equivalent (APE) growth of 1997 results so far announced. Its 57 per cent increase in APE to £30.8 million compared with a 51 per cent increase at Irish Progressive, 40 per cent at Ark Life, the 36 per cent increase reported yesterday by Canada Life and 24 per cent growth at Lifetime.
Results yesterday from Canada Life showed a 176 per cent rise in single-premium business to £72.2 million while annual-premium income was 15 per cent ahead at £20.1 million. The annual premium-equivalent income was 36 per cent higher at £27.3 million.
A breakdown of Friends Provident sales figures shows good growth in annual or regular pension and savings business and very strong growth in single-premium business. Lump-sum life income rose by 129 per cent to £64.8 million while lump-sum pensions business doubled to £90.5 million.
Annual premium income from pensions business rose by 25 per cent to £10.7 million while annual premiums from life business were 20.5 per cent higher at £4.5 million.
Managing director, Mr Adrian Hegarty, said pensions sales were boosted by a strong funds performance, while many clients reinvested the proceeds of a withprofits bond which matured late in 1996 in a new capital bond launched by the company. Sales of protection products and term assurance were the only areas of the market "we have not penetrated to the extent we would like", he said.
At Canada Life, which has seen huge demand for with-profits policies in recent weeks on speculation that the company may demutualise, growth in 1997 was dominated by life and savings products. Income from single-premium life products jumped by 300 per cent to £57.8 million boosted by investments in a "Celebration Bond" launched to celebrate 150 years in business. Single-premium pension income rose by 22 per cent to £14.4 million.
Annual premium income from life business was 20 per cent ahead at £11.7 million while annual premiums from pensions rose by 9 per cent to £8.4 million. Market speculation about demutualisation had a "negligible" impact on the results because the 1997 sales figures were closed off on December 19th, a spokesman said. Managing director, Mr Don Gallagher, reiterated his pre-Christmas warning to consumers that Canada Life had no current plans to demutualise.
