Final year figures for Scottish Widows' protection arm dropped almost 10%, despite an overall increase in IFA sales and in its life and pensions business.
The 2006 results released today reveal profit before tax for the insurer’s life, pensions and open ended insurance companies (OEICs) arm rose £46m to £701m over the past 12 months, while overall profit before tax for the insurer rose 11% to £973m.
However while on a present value of new business premiums (PVNBP) basis individual pensions rose by 1% to £2.2bn, and corporate and other pensions increased by 29% to £1.96bn, its protection business fell 9% to £232m from £255m in 2005.
In addition the company has revealed sales through its IFA distribution channel increased by 14% in 2006 to £5.36bn, which it says reflects the introduction of “improved product and service offerings for corporate pensions”.
And Scottish Widows says together with increased promotional activity this has resulted in “excellent growth in corporate pension sales via the IFA channel, and good levels of post A-Day growth in retirement income products”.
Meanwhile the company says it has already developed a new pensions platform which it intends to for launch in early 2007 to “support future pre and post retirement sales”, and it says it plans to continue to increase its “segmental focus on the IFA market to ensure maximum value is obtained from this market”.
However savings and investments business for the insurer also fell over the past 12 months, declining 11% to £1.3bn, which the company blames on the limiting of investment in the ‘Property Fund’ in June, although it argues this fall was “more than offset by a significant increase in the sale of OEIC and pension products”.
Archie Kane, chief executive of Scottish Widows, says in the context of an extremely competitive marketplace, these results demonstrate that Scottish Widows is continuing to deliver a strong performance.
He adds: “Of course, there is no room for complacency so we must maintain a robust trading momentum and build upon these positive results. Scottish Widows remains very well placed to benefit from the anticipated growth in savings, investments and insurance business over the coming years.”
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