Scottish Life new pensions business has fallen 9% in the first quarter of the year compared to the same period in 2006, following a slump in the group pensions sector.
Latest business figures from Royal London reveal total new life and pensions business fell 16% to £398m compared to £471m in the first quarter of 2006, while for Scottish Life new business fell to £310m from £343m in 2006.
However, Bright Grey, Royal London’s protection arm, increased business by 22% to £47m from £38m in 2006, while Scottish Life International saw a fall of 52% in new business in the first quarter, on a Present Value of New Business Premiums (PVNBP) basis.
In addition, Royal London Asset Management saw a rise in gross new business, excluding cash mandates, of 128% to £620m from £273m in 2006, while funds under management have increased to £31.5bn as of 31 March 2007.
Mike Yardley, group chief executive at Royal London, admits the pensions market “particularly group pensions” has been less buoyant than over the past year, which is reflected in the results.
He says the environment for individual pension new business in the first quarter was “more satisfactory” than the group pensions market, which he attributes to the launch of Scottish Life’s ‘Pension Portfolio’ in December.
But while Yardley points out regular premium pension business for Scottish Life increased by 2% compared to the first three months of 2006, he admits single premium business reduced by 15% which could reflect the “higher volume of scheme reconstructions in the period ahead of A-Day”.
However, he says: “Our continued focus has been on profitability, rather than writing new business on terms we believe would ultimately be unprofitable. This has been particularly important in the group defined contribution (DC) pensions market, where some companies are continuing to price on a basis which we do not believe is sustainable.”
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