CGNU Q1 Life New Business
CGNU PLC
19 April 2001
CGNU plc
Worldwide long-term savings new business
Three months to 31 March 2001
19 April 2001
- Record level of sales in the UK and worldwide in the three
months to 31 March 2001
- Worldwide new life and pensions sales up by 23% to
£3.3 billion
- Total UK new business sales up by 22% to £2.2 billion
- Strong sales in France at £564 million
- Excellent sales in Spain and Italy demonstrating the strength
of our new bancassurance distribution agreements
Richard Harvey, Group Chief Executive (designate), commented:
'Despite volatile equity markets, which created difficult conditions for
retail investment sales, our increased distribution capability produced record
new business sales, up 7%, in the first three months of the year.
'We have also achieved record life sales in the UK, up 22% to
£2.2 billion, which is an exceptional achievement following the launch of the
merged life business. There were very strong pension sales ahead of our
successful stakeholder pensions launch on 6 April. We are well placed, having
the distribution, financial and brand strength to achieve a leading position
in the new stakeholder market.
'Our Spanish and Italian life businesses benefited from the distribution
agreements with our new bancassurance partners, building top-10 positions in
these markets with excellent long-term growth potential.'
Enquiries:
Analysts/Investors:
Philip Scott, Group Executive Director UK Life +44(0)20 7662 2264
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
Single Regular Total
3 months 3 months
to Local to Local Local
31 March currency 31 March currency currency
2001 growth 2001 growth growth
£m £m
Life and pensions
United Kingdom 1,736 20% 120 45% 21%
France 554 5% 10 (13%) 4%
Netherlands 146 30% 15 (2%) 26%
Ireland 109 3% 14 2% 2%
Italy 232 268% 6 298% 269%
Spain 121 437% 12 326% 419%
Poland 2 (56%) 17 (85%) (84%)
Other Europe 48 86% 19 (11%) 43%
International 121 13% 14 28% 14%
------ ------ ------ ------ ------
Total life and
pensions 3,069 27% 227 (16%) 23%
Investment sales
United Kingdom 308 25% 2 100% 25%
Netherlands 15 (96%) - - (96%)
Other Europe 45 (37%) - - (37%)
International 42 (46%) - - (46%)
------ ------ ------ ------ ------
Total investment
sales 410 (48%) 2 100% (47%)
------ ------ ------ ------ ------
Total long-term
savings 3,479 9% 229 (16%) 7%
====== ====== ====== ====== ======
Navigator sales
(not included above) 200 30% - - 30%
United Kingdom:
Norwich Union, the leading UK life company with a market share of over 10%,
achieved record sales in the first three months of 2001. Total new business
sales increased by 22% to £2.2 billion (2000: £1.8 billion) and on an Annual
Premium Equivalent (APE) basis were up 29% to £326 million
(2000: £254 million). This growth continues the very strong performance
achieved in 2000 in the context of a flat market.
Excellent individual pension sales at £397 million (2000: £235 million)
increased by 69% over the first three months of 2000, and group pension sales
were up 9% at £201 million (2000: £184 million). These figures demonstrate
the success of the company's pre-stakeholder products and establish Norwich
Union as a leading player ready for the stakeholder market. We believe that
IFAs and banks will be the key distribution channels for stakeholder. We are
the leading IFA provider and, together with our bancassurance relationship
with The Royal Bank of Scotland (RBS), are well placed to achieve significant
and profitable stakeholder sales.
Single premium bond sales continue to perform strongly with an increase of 15%
to £981 million (2000: £853 million). Total other life products saw excellent
growth of 47% to £81 million (2000: £55 million) including strong growth in
term protection sales, up 63% to £13 million (2000: £8 million), where the
company has maintained its market leading position. Regular premium mortgage
sales grew 38% to £11 million (2000: £8 million) including strong growth in
mortgage protection.
Annuity single premium sales at £185 million were 6% down on the first three
months of last year (2000: £197 million) continuing to reflect our policy of
pricing annuities for profit as well as volume.
Despite recent stock market volatility investment sales grew 25% to
£310 million (2000: £248 million) reflecting strong growth in Isa and other
investment products.
In conjunction with our commitment to IFAs, who continue to provide around
75% of our life and pensions business, Norwich Union operates on a multi-
distribution basis which includes partnerships, a salaried direct salesforce
and telesales operation.
Our partnership with RBS combines the market-leading life capability of
Norwich Union in the UK with RBS's distribution power in the retail market.
We are working with RBS to develop and introduce a new and market-leading
product range during the course of 2001. Reporting for the first time, the
RBS life businesses, Royal Scottish Assurance and National Westminster Life
Assurance, have achieved £77 million of single premium sales and £7 million
of regular premium sales. In reporting the Group's numbers we have included
Norwich Union's 50% share of sales from this partnership.
France:
French sales were up 4% against a strong first quarter in 2000 and difficult
equity markets. Total new single premiums increased by 5% over 2000 with
total AFER single premium bond sales up 8% at £332 million
(2000: £296 million), benefiting from its position as the largest savings
organisation in France with 540,000 members and a competitive investment yield
in 2000.
Single premium SFER sales, the unit-linked element of the AFER contract, were
£83 million (2000: £89 million) and reflected consumer preference for the
fixed interest element of the AFER contract following recent volatility in the
French equity market. Total unit-linked sales were £270 million
(2000: £274 million) following this trend.
Group protection products saw growth of 4% at £45 million
(2000: £42 million).
Victoire Asset Management, our French asset management business, was declared
'best fund manager' in France by La Tribune and Standard & Poor's for
performance over a one-year period, out of 76 organisations offering more
than 10 funds. In addition, Victoire also came third in the 10-year
performance category. These awards testify to the strength of Victoire's
business, underpinned by excellent long-term investment performance.
Netherlands:
Our top-five business in the Netherlands, Delta Lloyd Nuts Ohra, saw new life
and pensions sales up 26% at £161 million (2000:£124 million).
Life and pensions single premiums increased 30% to £146 million
(2000: £109 million), with strong sales in life, up 27% at
£54 million (2000: £42 million), benefiting from pipeline business arriving at
the end of 2000 ahead of tax reforms. Regular premium sales were in line with
prior year at £15 million.
Single premium investment sales of £15 million (2000: £371 million) were
substantially down on the same period last year, reflecting extreme
volatility in investment markets, which resulted in negative consumer
sentiment to equity-backed products.
Ireland:
Single premium pensions sales were particularly strong, up 42% to £25 million
(2000: £17 million), while regular premium sales rose by 20% to £12 million
(2000: £10 million). Sales of savings products slowed in advance of the
launch of the Government's new tax incentivised savings initiative - the
Special Savings Incentive Account - which is expected to provide a strong
stimulus to the investment and savings market. A combination of a competitive
product and strong distribution links with IFAs mean that we are well
positioned to compete strongly when this product is introduced from 1 May
2001.
Overall new business sales at Hibernian Life & Pensions advanced by 2% to
£123 million (2000: £117 million), consolidating our position as a top-five
provider of life and pensions products.
Italy:
Total new business sales increased significantly to £238 million
(2000: £62 million) as a result of our expanded bancassurance distribution
network. Bancassurance sales account for over 70% of new life business sales
in Italy.
We recently announced a major new distribution agreement with UniCredito
Italiano to provide life and savings products to the 1.4 million customers of
its subsidiary, Cassa di Risparmio di Torino (CRT), and this contributed
total sales of £121 million in the period. The addition of CRT's 500 bank
branches will in due course bring our distribution capability to
over 2,000 branches. During 2001 we will be developing new products and
working closely with our bank partners to maximise the significant
distribution potential of these agreements.
Spain:
Total new business sales increased significantly to £133 million
(2000: £25 million). Our partnership with Bancaja, Spain's fourth-largest
savings bank with 2.4 million customers, produced strong sales of £118 million
in the quarter.
Plus Ultra, our Spanish subsidiary, produced lower sales of £15 million
reflecting reduced demand for unit-linked products in the uncertain investment
environment.
Poland:
CU Polska is the market leader for private pensions and individual life
assurance.
New regular pension sales of £8 million (2000: £86 million) were down on the
prior year reflecting the one-off pensions privatisation in 1999, which flowed
through into 2000. We continue to capture our market share as new entrants
join the employment market.
Life sales were 38% lower at £11 million (2000: £15 million), reflecting the
downturn in the Polish economy, and following the exceptionally high sales
volumes achieved during pension privatisation when interest in financial
products was at its height. We are maintaining our life market share at
around 20%.
Other Europe:
Our Dublin-based offshore life and investment business, which commenced
trading late in the first quarter of 2000, contributed single premiums of £24
million (2000: £2 million). Sales in Germany totalled £23 million
(2000: £26 million) and in Luxembourg sales of UCITS (collective investment
schemes) were £45 million (2000: £68 million).
Sales momentum in Turkey was maintained with total premiums unchanged at
£6 million, despite the recent economic turmoil. Pension legislation has now
been enacted and we plan to build on our position as a top-five life assurance
provider to achieve a market-leading position in pensions.
In the emerging markets of Eastern Europe we continue to develop our life
businesses in Romania and the Czech Republic (where we have been integrating
our recently acquired pension business). We also recently announced the
acquisition of Magyar Elet es Nyugdijbiztosito Reszvenytarsasag (Mebit), the
sixth-largest life insurance business in Hungary, which is subject to
regulatory approval.
International:
In the United States, single premium business was up 44% to £64 million
(2000: £40 million), with good progress in annuity sales.
Sales from our Australian life and pensions business grew by 5% to £57 million
(2000: £59 million). Whilst not included in the life new business figures,
our Navigator fund of funds service in Australia continued its impressive
growth record, up 30% to £200 million (2000: £166 million). This excellent
growth reflected the continued market trend towards multi-manager products,
with Navigator being well positioned as a market-leading service.
On 1 April 2001 we concluded the sale of one of our two Canadian life
businesses, with the sale of the remaining business due to be completed at the
end of April. Our Canadian businesses contributed £3 million
(2000: £3 million) of regular premium and £4 million (2000: £11 million) of
single premium business.
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 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 from ongoing business of over £27 billion and
assets under management of more than £210 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.
2001 2000
France - francs £1 = 10.40 £1 = 10.74
Netherlands - guilders £1 = 3.50 £1 = 3.61
Ireland - punts £1 = 1.25 £1 = 1.29
Italy - lira £1 = 3,070.90 £1 = 3,170.83
Spain - pesetas £1 = 263.89 £1 = 272.47
Poland - zloty £1 = 5.93 £1 = 6.62
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 3 months
to Local
31 March currency
2001 growth
£m
United Kingdom
IFA 244 24%
Partnerships/Direct 82 45%
----- -----
326 29%
France 66 1%
Netherlands 31 (52%)
Ireland 25 2%
Italy 29 273%
Spain 24 348%
Poland 17 (85%)
Other Europe 28 (10%)
International 31 3%
----- -----
Total long-term savings 577 (2%)
===== =====
Total long-term savings APE grew 15% over the first quarter of 2000 to
£569 million (2000: £489 million) when excluding total Poland pensions
new business APE of £8 million (2000: £86 million). The reduction in
Poland pensions new business APE reflects the one-off pensions
privatisation in 1999 that flowed through into 2000.
6. Netherlands - the life and pensions new business figures reported for
the three months to 31 March 2001 exclude the impact of the recently
acquired Fokker pension scheme. New business figures in relation to
this contract will be reported in the Group's new business figures to
30 June 2001.
CGNU plc is a company registered in England No. 2468686.
Registered office St Helen's 1 Undershaft London EC3P 3DQ
Worldwide long-term savings new business
Single Regular
3 3 3 3
months months months months
to 31 to 31 Local to 31 to 31 Local
March March currency March March currency
2001 2000 growth 2001 2000 growth
£m £m £m £m
United Kingdom
Individual pensions 371 218 70% 26 17 53%
Group pensions 138 144 (4%) 63 40 58%
Mortgage - - - 11 8 38%
Annuities 185 197 (6%) - - -
Bonds 981 853 15% - 1 (100%)
Other life 61 38 61% 20 17 18%
Peps/Isas/unit
trusts /Oeics 308 247 25% 2 1 100%
----- ----- ----- ----- ----- -----
2,044 1,697 20% 122 84 45%
France
AFER (excluding unit-
linked) 249 207 16% - - -
Unit-linked & other
savings 266 268 (4%) 4 6 (29%)
Protection business 39 36 4% 6 6 5%
----- ----- ----- ----- ----- -----
554 511 5% 10 12 (13%)
Netherlands
Individual pensions 36 44 (21%) - - -
Group pensions 56 23 131% 4 5 (23%)
Life 54 42 27% 11 10 13%
Unit trusts 15 371 (96%) - - -
----- ----- ----- ----- ----- -----
161 480 (68%) 15 15 (2%)
Ireland
Life & savings 84 86 (5%) 2 4 (42%)
Pensions 25 17 42% 12 10 20%
----- ----- ----- ----- ----- -----
109 103 3% 14 14 2%
Italy
Life & savings 232 61 268% 6 1 298%
----- ----- ----- ----- ----- -----
232 61 268% 6 1 298%
Spain
Life & savings 109 20 435% 9 3 223%
Pensions 12 2 462% 3 - -
----- ----- ----- ----- ----- -----
121 22 437% 12 3 326%
Poland
Life & savings 2 3 (56%) 9 12 (34%)
Pensions - - - 8 86 (92%)
----- ----- ----- ----- ----- -----
2 3 (56%) 17 98 (85%)
Other Europe
Life & pensions 48 25 86% 19 21 (11%)
UCITS and other 45 68 (37%) - - -
----- ----- ----- ----- ----- -----
93 93 (4%) 19 21 (11%)
International
Life & pensions 121 107 13% 14 11 28%
Unit trusts 42 85 (46%) - - -
----- ----- ----- ----- ----- -----
163 192 (12%) 14 11 28%
----- ----- ----- ----- ----- -----
Total long-term
savings 3,479 3,162 9% 229 259 (16%)
===== ===== ===== ===== ===== =====
Analysed:
Life & pensions 3,069 2,391 27% 227 258 (16%)
Investment sales 410 771 (48%) 2 1 100%
----- ----- ----- ----- -----
Total long-term
savings 3,479 3,162 9% 229 259 (16%)
===== ===== ===== ===== ===== =====
Navigator sales
(not included above) 200 166 30% - - -
Analysis of UK long-term savings sales by distribution channel
Single Regular
3 3 3 3
months months months months
to 31 to 31 Local to 31 to 31 Local
March March currency March March currency
2001 2000 growth 2001 2000 growth
£m £m £m £m
IFA
- life and pensions
products 1,284 1,173 9% 95 61 56%
- investment
products 198 177 12% 1 1 -
Partnerships/Direct
-life and pensions
products 452 277 63% 25 22 14%
- investment
products 110 70 57% 1 - -
----- ----- ----- ----- ----- -----
Total UK
long-term savings 2,044 1,697 20% 122 84 45%
===== ===== ===== ===== ===== =====
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