31 August 2006
Figures from the Association of British Insurers show that, for
the second consecutive quarter, life and pensions new business has
reached record levels, driven by further strong growth in the
Individual Pensions market.
In the second quarter of 2006, overall new business was
£3.9bn Annual Premium Equivalent (APE), an industry benchmark
of Regular Premiums plus one-tenth of single premiums. Once again,
individual pensions performed strongly, with £1.4bn APE new
business, up 36% on Q1 2006. Sales of both regular and single
premium individual pensions increased significantly, and annuities
also hit a record level of nearly £2.3bn, an increase of
32.3% on Q1 2006.
Chris Kenny, the ABI's Director of Life and Pensions, said:
"It's encouraging to see continued growth in the life and pensions
sector. We are beginning to see more clearly the positive effects
that tax simplification has had since A-Day. The new rules have had
a particularly beneficial effect on annuities, as people can now
buy capital protected and short-term policies, which give greater
choice and peace of mind.
"The challenge for the industry now is to ensure that this
growth is sustained over time. In particular, we must avoid the
possibility of current pension reform proposals creating savings
inertia because Personal Accounts are not due to begin until 2012
at the earliest."
