Friends Provident UK Life and Pensions new business fell 27% in 2008 to £549m, compared to £751m in 2007.
The results come as the group readjusted to its new focus on key lines of business including group pensions and its international arm.
Levels of individual pensions business in particular suffered following the withdrawal of products offering initial commission early in 2008.
Protection business for the year fell 24% on 2007 to £52m on the back of the weak housing market. It was also hit hard by the decline in individual income protection - the group's main focus - down 12% at around £10m.
Friends Provident admitted its critical illness terms were less competitive than some other providers, leading life and critical illness business to fall 27% to around £35m. The group has since enhanced its terms.
Meanwhile, Friends Provident's savings and investments and annuities business saw no sales in terms of regular premiums in Q4 last year.
Furthermore, on a 12-month basis regular premiums in savings and investments fell 50% to £0.7m, while new business in annuities remained at zero.
In its 2008 trading update, the group says: "Levels of savings and investment business remain modest. We continue to focus on providing annuities for our pensions customers as they reach retirement. We have made a number of improvements to make this process clearer for customers although we would not expect an immediate impact on our sales volumes."
Recognising the "tough business environment" Friends Provident has implemented a cost reduction programme.
However, in light of the new business figures the group says: "We expect there will be a short-term impact from a reduction in volumes of new business ahead of the actual reduction in acquisition expenses in the UK, which will act to reduce margins for 2008 compared to those reported for 2007."
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