New business at Friends First declines by 57% to €9m in first half

TURBULENT MARKET conditions saw the value of new business at insurance and investment firm Friends First decline by 57 per cent in the first half of 2008, leading to a knock-on decline of 15 per cent in new business volumes at its parent company Eureko.

According to first-half results for Dutch insurer Eureko, new business at Friends First fell from €21 million in the first half of 2007 to € 9 million in the first half of 2008, due to lower sales of unit-linked products.

The drop-off caused a decline in Eureko’s new business, from €33 million to € 28 million. A spokesperson for Friends First said they did comment on interim figures.

“Negative developments on the stock markets have had a considerable impact on Friends First’s life business,” Eureko said in its interim statement.

New deposits slumped at the group’s Irish subsidiary by 67.6 per cent, down to € 133 million from € 410 million during the first half of 2007, as poor market conditions saw demand dramatically decrease for new deposits on investment contracts.

However, despite the turbulent market, Friends First grew its life assurance business during the first half of 2008, with gross written premiums increasing by 7.2 per cent to € 134 million, up from € 125 million in the same period in 2008.

This increase was driven by higher sales of pension and income protection products.

Friends First Finance, Eureko’s Irish consumer finance operation, “is still performing reasonably well”, although its profit before tax fell by 25 per cent from € 4 million in 2007 to €3 million in 2008.

The operation grew its banking credit portfolio during the first half of the year by 17 per cent, or €108 million, to €735 million.

Eureko’s combined banking operations grew by 2 per cent in the first half of 2008.