Life, pension products sales fall 13%
THE FALL in the sale of life and pensions products showed no signs of abating in the second quarter of the year as new figures released to the industry showed that the market declined by 13 per cent in the first half of the year.
The figures released to the industry by actuarial consultants Milliman show sales of life single premium products down 46 per cent to €473 million in the first half of the year on last year. Pension single premium products were down 3 per cent to €1.7 billion.
Industry insiders attributed the decline to customers concentrating on paying down debt and putting money on deposit instead of investing in life assurance investment and pension products.
Annual premium equivalent (APE), the gauge of sales activity followed in the industry, fell to €417 million in the first six months of the year from €478 million for the same period in 2011, reversing an increasing trend in the first halves of the two previous years.
Banks over-paying for deposits and fixed-term savings products have also been blamed for the falling sales of pension products.
“The most disappointing thing is that the market is continuing to fall and that we haven’t seen the bottom,” said one industry source.
The market has fallen more than 50 per cent from peak as a recovery in insurance sales during 2010 and the first half of last year proved temporary and the recession drove customers away from pension and investments.
PRSA investments were down 46 per cent on single premium business for the first half of the year, while they fell 37 per cent in terms of annual premiums.
On the pensions side of the industry, annual premiums fell 8 per cent, while they were down 7 per cent on the life side. Group risk business fell by 22 per cent.
The data covers nine life and pensions companies, including the number one player in the market, Irish Life, which was acquired by the Government for €1.3 billion as part of the State bailout of former sister bank Permanent TSB.
The performance of the industry suggests the Government’s strategy for Irish Life, which it plans to sell once the market recovers, may result in it retaining the company for a longer period than expected.
One company restated its figure for sales in single premium PRSAs for the first quarter of the year to show a decline of 44 per cent, not the fall of 28 per cent reported. This would not have affected overall total pensions figures for the first quarter, Milliman said.