CGNU plc New Business
CGNU PLC
17 January 2001
CGNU plc
Worldwide long-term savings new business
Year to 31 December 2000
17 January 2001
- Record level of sales in the UK and worldwide in the three months to 31
December 2000
- Full-year worldwide new business sales up by 24% to £13.5 billion
- Total UK new business sales up by 21% to £7.5 billion
- Strong growth achieved in major continental European businesses
- Worldwide retail investment sales up 63% to £2.5 billion*
* Including sales of retail investment products in the Netherlands
reported for the first time of £1,025 million (1999: £230 million)
Bob Scott, Group Chief Executive, commented:
'Excellent new business sales of £13.5 billion worldwide were achieved in
2000. This is an exceptional achievement when set in the context of the merger
between CGU and Norwich Union and the integration of the respective
businesses.
'Our UK business delivered outstanding figures, up 21% to £7.5 billion against
the background of an anticipated flat market. Record sales in the fourth
quarter follow the launch of the new Norwich Union brand in October and
demonstrate the strength of the business, its people and product range.
'The Group's major continental European businesses also reported excellent
results. Our French business, up 33% to £1.9 billion, capitalised on the
growth in unit-linked sales. In Spain, sales rose by more than 600%, boosted
by our new bancassurance partnership with Bancaja, Spain's fourth-largest
savings bank. In the Netherlands we reported impressive growth in retail
investment sales, up 381% to £1.0 billion.
'The strong sales performance was achieved in a year of major change where
'business as usual' remained a priority through the merger process. The
initiatives we have taken to develop our business and build new distribution,
position us for further progress in 2001.'
Enquiries:
Analysts/Investors:
Philip Scott, Group Executive Director UK Life +44(0)19 0445 2827
Steve Riley, Investor Relations Director +44(0)20 7662 8115
Media:
Hayley Stimpson, Director of External Affairs +44(0)20 7662 7544
Alex Child-Villiers, Financial Dynamics +44(0)20 7269 7107
------------------------------------------------------------------------------
Page 2
Single Regular Total
12 12
months months
to Local to Local Local
31 Dec currency 31 Dec currency currency
2000 growth 2000 growth growth
£m £m
Life and pensions
United Kingdom 6,254 22% 354 14% 22%
France 1,821 34% 40 4% 33%
Netherlands 463 47% 73 (6%) 37%
Ireland 383 26% 41 130% 32%
Poland 10 (19%) 181 (51%) (50%)
Spain 336 762% 23 89% 603%
Other Europe 399 (51%) 125 18% (44%)
International 467 2% 53 14% 3%
------ ------ ------ ------ ------
Total life and pensions 10,133 20% 890 (9%) 17%
Investment sales
United Kingdom 877 10% 20 67% 11%
Netherlands 1,025 381% - - 381%
Other Europe 284 136% - - 136%
International 295 (25%) - - (25%)
------ ------ ------ ------ ------
Total investment sales 2,481 63% 20 67% 63%
------ ------ ------ ------ ------
Total long-term savings 12,614 27% 910 (8%) 24%
------ ------ ------ ------ ------
United Kingdom:
Norwich Union has become the leading UK life company through strong organic
growth in 2000 set against an anticipated flat overall market. Total UK new
business sales increased by 21% to £7,505 million (1999: £6,227 million) and
in annual premium equivalent terms sales were 19% higher at £1,087 million
(1999: £913 million). The sales in 2000 demonstrate growing market share and
the excellent performance of our UK life business during a period of merger
integration.
Sales in the discrete fourth quarter were up 16% over the equivalent period in
1999 to £1,969 million (discrete fourth quarter 1999: £1,694 million),
returning a record level for a single quarter. The fourth quarter sales follow
the launch of the new Norwich Union brand with over 50 new products in October
2000 and, supported by a strong advertising campaign, position the brand as
the market leader going into 2001.
Norwich Union is also the leading IFA provider. IFAs provide more than 75% of
our UK long-term savings business, and we achieved an increase of 25% in new
business through the IFA channel during 2000.
New single premiums increased by 21% to £7,131 million (1999: £5,905 million)
including strong performance in single premium bonds and savings sales, up 28%
to £3,758 million (1999: £2,930 million).
New regular premiums increased by 16% to £374 million (1999: £322 million),
including an increase in term assurance sales to £40 million (1999: £18
million), where the company has recently re-priced its contracts,
consolidating its position as the market leader. Mortgage business sales at
£37 million (1999: £55 million) were down by 33%, reflecting the shift from
mortgage endowment sales to mortgage protection. We will continue to be a high
volume player in this market, focusing on mortgage protection business and the
delivery of first-class value to customers.
Total individual pension sales at £1,170 million (1999: £879 million) showed
an increase of 33% over 1999, reflecting the continuing success of our
pre-stakeholder products, while total group pension sales at £607 million
(1999: £482 million) were up 26% over 1999.
Stakeholder pensions remain a top priority for 2001. Norwich Union was the
first pension provider to apply for registration and was in the first tranche
of providers to become registered. The business of seeking to encourage
employers to designate Norwich Union as the stakeholder provider for their
workforce is showing significant progress and we remain confident of achieving
a strong market position.
------------------------------------------------------------------------------
Page 3
Annuity single premium sales at £772 million (1999: £904 million) were 15%
down on 1999 maintaining our policy of pricing annuities for profit as well as
volume. With-profit annuity sales continued to show significant growth at
£111 million, up from £66 million in 1999.
Investment sales increased by 11% to £897 million (1999: £807 million)
reflecting continued strong sales of Isas.
Norwich Union operates on a multi-channel basis and over 75% of sales comes
through IFAs. We aim to grow our commitment to the IFA channel and, at the
same time, expand our partnership arrangements and invest in our salaried
direct sales force and telesales operation. Our partnership with The Royal
Bank of Scotland was announced earlier in the year and combines the
market-leading life capability of Norwich Union in the UK with The Royal Bank
of Scotland's distribution power in the retail market. We are confident that
this alliance will provide the opportunity for further strong and innovative
sales performance in the UK market. No sales from this partnership are
included within the 2000 life new business figures.
France:
Strong growth continued into the fourth quarter and produced a significant
increase in total new business sales over 1999 of 33% to £1,861 million
(1999: £1,511 million), outperforming anticipated overall market growth of
approximately 20%. The excellent performance in 2000 demonstrates the
strength of the multi-distribution capability in CGNU's second-largest life
business.
Single premium new business, which dominates the French market, increased by
34% to £1,821 million (1999: £1,469 million). Total AFER sales increased by
29% over 1999, benefiting from its position as the largest savings
organisation in France, having 540,000 members and £15 billion of funds under
management. Policyholders' investment yield for 2000 of 6.14% will help to
maintain our competitive position during 2001. Sales of SFER, the unit-linked
element of the AFER contract, increased by 160% compared with 1999, and
represented 32% of total AFER sales, reflecting the trend towards unit-linked
products.
Abeille vie business also performed strongly over the year, increasing sales
by 37% to £845 million (1999: £664 million) capitalising on the growth in
equity-linked products.
Netherlands:
Delta Lloyd Nuts Ohra has a market share of around 6%, making it the
third-largest life and pensions insurer in the Netherlands. Single premium
life and pensions sales were up 47% at £463 million (1999: £340 million),
reflecting the inclusion of £85 million from the acquisition of Nuts Ohra and
good individual pensions sales. Regular group pensions sales were up 8%,
although total regular premium sales were slower due to a reduction in annual
premium market volumes ahead of tax reforms.
Delta Lloyd Nuts Ohra is one of the leading fund managers in the Netherlands.
Ohra's award-winning fund performance has led to substantial growth in assets
under management over the year and the Ohra Aandelenfonds maintained its lead
in the fund performance rankings. Reported for the first time, Delta Lloyd
Nuts Ohra achieved growth in retail investment sales of 381% to £1,025 million
(1999: £230 million; pro forma 1999: £305 million when including a full year
of sales from Ohra), accounting for approximately 20% of the market. Building
on the success of the Delta Lloyd and Ohra investment businesses, we are
planning to launch mutual funds into Germany and Belgium later in 2001.
Ireland:
The re-launch of the complete product range under the strong and established
Hibernian brand was completed in October 2000. Total new business sales
advanced by 32% to £424 million (1999: £344 million), consolidating our
position as a top-five provider of life and pensions products.
Total single premium sales increased 26% to £383 million (1999: £325 million),
boosted by Hibernian, acquired in January 2000, together with strong sales of
pensions and the Celebration Bond. Total regular premium sales grew strongly,
up 130% to £41 million (1999: £19 million), principally reflecting the
contribution from Hibernian and strong pension sales.
------------------------------------------------------------------------------
Page 4
Poland:
CU Polska is the market leader for private pensions and individual life
assurance.
The comparison of CU Polska pensions new business sales is influenced by the
one-off privatisation of pensions provision and exceptional concentration of
sales in the second half of 1999. Sales of £123 million were achieved in 2000
compared with £282 million in the previous year. With a pension customer base
in excess of 2.4 million and a market share of around 30% measured by assets
under management, CU Polska continues to capture a significant share of new
pension business, adding 100,000 new pension clients during 2000.
The high level of life sales in the market in 1999 was largely driven by the
interest in financial services generated by the pension reform and was not
repeated in 2000. As a result, while maintaining a Polish life market share
at around 20%, CU Polska's life sales were lower at £48 million
(1999: £70 million).
The sales figures for CU Polska exclude sales from the Norwich Union life and
pensions businesses sold to Sampo Insurance Company plc in November 2000. The
Norwich Union businesses contributed regular premiums of £16 million
(1999: £37 million) from pensions sales and £4 million (1999: £nil) from life
sales.
Spain:
Total new business sales, including sales from our bancassurance partnership
with Bancaja, Spain's fourth-largest savings bank, increased significantly to
£359 million (1999: £55 million). Our Bancaja partnership, completed at the
end of July 2000, contributed £11 million of annual premium sales and
£265 million of single premium new business sales, including £152 million from
three large single premium corporate pension sales.
Our other operations produced strong growth in unit-linked savings products,
with single premium sales increasing 82% to £71 million (1999: £42 million),
reflecting the continuing success of unit-linked savings and pension products,
assisted by the distribution of these products through our direct sales force.
We remain confident about the potential for developing our business in
conjunction with Bancaja to strengthen our overall position as a top-10
provider of life and pensions products in Spain.
Other Europe
Italy: Our focus during 2000 has been on the development of new and existing
distribution partnerships. Regular premium sales through our Banca Popolare di
Lodi partnership increased strongly, up 59% to £7 million (1999: £5 million).
This growth provides a solid base as preparations are finalised to expand
distribution into the larger Banca Popolare di Lodi branch network, which will
progressively allow exclusive access to over 1,200 branches. Single premium
sales of unit-linked products through the 250 branches of Banca delle Marche,
launched in September 1999, increased by 46% to £74 million
(1999: £55 million). The comparison with 1999 total new business sales from
our Other European businesses is influenced by the cessation of our exclusive
agreement with Credito Italiano in 1999.
Other businesses: Our Dublin-based offshore life and investment business,
offering tax-efficient products to high net worth individuals, commenced
trading late in the first quarter of 2000 and contributed an encouraging
£105 million in single premium sales. In Luxembourg, sales of UCITS
(collective investment schemes) reported a strong performance, up 136% to
£284 million (1999: £130 million). Our German business reported annual
premiums up 31% to £48 million (1999: £39 million) and single premiums of
£49 million.
In Turkey sales increased by 58% to £22 million (1999: £16 million) reflecting
the expansion of our direct sales network. As a result, our market share has
increased to 8% (1999: 3%), promoting the business into a top-five position
well placed to benefit from the introduction of new private pension
legislation expected in mid-2001. Encouraging progress is being made in
Romania following the launch of the business in October 2000. In January 2001
we completed the acquisition of a majority shareholding in a Czech Republic
pension fund which will complement our existing life operation and enable a
wider range of products to be marketed.
------------------------------------------------------------------------------
Page 5
International:
Sales from our Australian life and pensions business grew by 4% to
£255 million (1999: £258 million) with the trend away from traditional life
products. In the United States, single premium business increased 8% to
£198 million (1999: £172 million), with regular premium sales of £20 million
(1999: £20 million). Preparations are progressing well to implement our
distribution agreement with Wells Fargo, the sixth-largest bank in the United
States, providing access ultimately to 2,600 branches. In December 2000 we
announced that we had entered into an agreement for the sale of our two
Canadian life businesses, expected to complete in the first quarter this year.
The Canadian businesses contributed £14 million (1999: £12 million) of regular
premium business and £30 million (1999: £35 million) of single premium
business.
Navigator
Sales from our Navigator fund of funds service in Australia continued its
excellent growth record, up 36% to £824 million (1999: £633 million). Total
funds under administration were £2.4 billion. The excellent growth reflected
the successful launch of an expanded range of financial services and the
market popularity of investment products.
------------------------------------------------------------------------------
Page 6
Notes to Editors
1. CGU and Norwich Union merged on 30 May 2000 to create CGNU plc the
UK's largest insurance group and one of the top-five life insurers in
Europe with substantial positions in other markets around the world
making it the world's sixth largest insurer based on gross worldwide
premiums.
CGNU's principal business activities are long-term savings, fund
management and general insurance with worldwide premium income and
retail investment sales of £26 billion and assets under management of
more than £200 billion.
From 2 October 2000, the combined life and pensions, retail fund and
general insurance businesses in the UK operate under the Norwich
Union brand, and the institutional investment business operates under
the Morley Fund Management brand.
2. The worldwide new business figures presented are combined CGU and
Norwich Union.
3. New business figures have been translated at average exchange rates
applying for the period.
2000 1999
France - francs £1 = 10.76 £1 = 9.99
Netherlands - guilders £1 = 3.62 £1 = 3.35
Ireland - punts £1 = 1.29 £1 = 1.20
Poland - zloty £1 = 6.57 £1 = 6.44
Spain - pesetas £1 = 272.98 £1 = 252.84
4. All growth rates are quoted in local currency.
5. Annual premium equivalent (APE) is an UK industry standard for
calculating life, pensions and investments new business levels. It is
the total of new regular premiums plus 10% of single premiums.
Annual premium equivalent 12 months
to Local
31 Dec currency
2000 growth
£m
United Kingdom
IFA 853 23%
Partnerships/Direct 234 8%
------ ------
1,087 19%
France 222 27%
Netherlands 222 70%
Ireland 79 65%
Poland 182 (51%)
Spain 57 256%
Other Europe 193 (3%)
International 129 (2%)
------ ------
Total long-term savings 2,171 10%
====== ======
6. Reported within the new business figures for the first time, Delta
Lloyd Nuts Ohra achieved full-year retail investment sales of £1,025
million. The phasing of the sales during 2000 is as follows:
Retail
investment
sales
£m
Cumulative 3 months ended 31 March 2000 371
Cumulative 6 months ended 30 June 2000 584
Cumulative 9 months ended 30 September 2000 813
Cumulative 12 months ended 31 December 2000 1,025
CGNU plc is a company registered in England No. 2468686.
Registered office St Helen's 1 Undershaft London EC3P 3DQ
------------------------------------------------------------------------------
Page 7
Worldwide long-term savings new business
Single
12 12
months months
to to Local
31 Dec 31 Dec currency
2000 1999 growth
£m £m
United Kingdom
Individual pensions 1,007 748 35%
Group pensions 534 412 30%
Mortgage - - -
Annuities 772 904 (15%)
Bonds and savings 3,758 2,930 28%
Other life 183 116 58%
Peps/Isas/unit trusts/Oeics 877 795 10%
------ ------ ------
7,131 5,905 21%
France
AFER (excluding unit-linked) 690 712 4%
Unit-linked & other savings 1,001 622 74%
Protection business 130 135 3%
------ ------ ------
1,821 1,469 34%
Netherlands
Individual pensions 215 89 162%
Group pensions 178 174 10%
Life 70 77 (2%)
Unit trusts 1,025 230 381%
------ ------ ------
1,488 570 182%
Ireland
Life 317 294 16%
Pensions & annuities 66 31 130%
------ ------ ------
383 325 26%
Poland
Life & savings 10 13 (19%)
Pensions - - -
------ ------ ------
10 13 (19%)
Spain
Life & savings 113 34 257%
Pensions 223 8 2906%
------ ------ ------
336 42 762%
Other Europe
Life & pensions 399 886 (51%)
UCITS and other 284 130 136%
------ ------ ------
683 1,016 (27%)
International
Life & pensions 467 454 2%
Unit trusts 295 411 (25%)
------ ------ ------
762 865 (10%)
------ ------ ------
Total long-term savings 12,614 10,205 27%
====== ====== ======
Including investment sales of 2,481 1,566 63%
Regular
12 12
months months
to to Local
31 Dec 31 Dec currency
2000 1999 growth
£m £m
United Kingdom
Individual pensions 163 131 24%
Group pensions 73 70 4%
Mortgage 37 55 (33%)
Annuities - - -
Bonds and savings 5 6 (17%)
Other life 76 48 58%
Peps/Isas/unit trusts/Oeics 20 12 67%
------ ------ ------
374 322 16%
France
AFER (excluding unit-linked) - - -
Unit-linked & other savings 22 20 19%
Protection business 18 22 (10%)
------ ------ ------
40 42 4%
Netherlands
Individual pensions - - -
Group pensions 23 23 8%
Life 50 61 (12%)
Unit trusts - - -
------ ------ ------
73 84 (6%)
Ireland
Life 12 8 60%
Pensions & annuities 29 11 185%
------ ------ ------
41 19 130%
Poland
Life & savings 42 57 (24%)
Pensions 139 319 (55%)
------ ------ ------
181 376 (51%)
Spain
Life & savings 15 8 96%
Pensions 8 5 77%
------ ------ ------
23 13 89%
Other Europe
Life & pensions 125 110 18%
UCITS and other - - -
------ ------ ------
125 110 18%
International
Life & pensions 53 45 14%
Unit trusts - - -
------ ------ ------
53 45 14%
------ ------ ------
Total long-term savings 910 1,011 (8%)
====== ====== ======
Including investment sales of 20 12 67%
Analysis of UK long-term savings sales by distribution channel
IFA
- life and pensions products 5,014 4,024 25% 274 235 17%
- investment products 654 517 27% 12 6 100%
Partnerships/Direct
- life and pensions
products 1,240 1,086 14% 80 75 7%
- investment products 223 278 (20%) 8 6 33%
------ ------ ------ ------ ------ ------
Total UK long-term savings 7,131 5,905 21% 374 322 16%
====== ====== ====== ====== ====== ======
Latest directors dealings
- 1 hour ago Oxford Nanopore Technologies
- 2 hours ago AVI Global Trust
- 2 hours ago LSL Property Services
- 3 hours ago Bluebird Merchant Ventures (DI)
- 3 hours ago Power Probe PLC