Zurich Irish pension and life business shrinks by 22%
ZURICH LIFE Ireland saw life and pensions business decline by 22 per cent in the first half of the year, as a “challenging” market and decline in regular-premium business saw levels fall back to €65.8 million. This compares with an average decline of 13 per cent for the overall Irish market.
However, the insurer reported strong growth in its investment-only business, which advanced by 93 per cent to €116.7 million in the six months to June 30th, up from €60.4 million in 2011.
Overall, the insurer saw a decline of 14 per cent in new business, to €77.4 million from €89.8 million in the same period in 2011.
As a result, Zurich Life saw overall market share slip in the first six months of the year to 15 per cent from 16 per cent at the end of last year, and 19 per cent prior to that.
Profitability was also affected, with operating profit for its Irish operation falling by 40 per cent from $15 million (€12.2 million) in 2011 to $9 million.
Its new-business margin showed a slight increase, however, up to 2.3 per cent from 2.2 per cent in 2011.
“Despite a challenging market in Ireland, where margins remain under pressure, Zurich Life is focused on maintaining our pricing discipline and writing profitable business to ensure our long-term financial strength and leading position in the independent broker market,” Zurich Life Assurance chief executive Anthony Brennan said.
An expected drop in deposit rates, as banks move in the direction of the overall European rate, would “create opportunities for non-deposit alternatives such as unit-linked funds”, Mr Brennan said.
Zurich’s life assurance and income protection business had a positive first half, with new business growing by 41 per cent to €2.8 million.
Similarly, business was a lot brighter at cross-Border level. Zurich, which writes business across the EU from its Dublin operation in markets including the UK, Germany and Italy, saw new business jump by 37 per cent to €48.0 million, up from €34.9 million in the same period in 2011.
When combined, new business in the cross-Border and Irish markets advanced by 1 per cent to €125.4 million.
The firm recently became the first provider in Ireland to be licensed by the Pensions Board to offer sovereign annuities.
At group level, Zurich Insurance, which is the biggest Swiss insurance company, reported a decline in second-quarter profit of 19 per cent, with net income down to $1.08 billion from $1.33 billion a year earlier.
The group held a 1 per cent, or $2 billion, investment in Irish Government debt as of the end of June.