Sales at life and pensions company Hibernian dropped by 41 per cent in the first quarter of the year as the "hangover" created by last year's special savings incentive account (SSIA) rush ate into new business sales.
Figures released by Hibernian's parent, Aviva, yesterday show that Hibernian made sales of £68 million sterling (€98 million) in the first three months, down from £116 million a year earlier.
New business sales fell from £31 million to £21 million on an annual premium equivalent (APE) basis, with most of the drop attributable to last year's non-recurring SSIA APE sales of £8 million.
Hibernian's marketing and product development director, Mr Ian Veitch, said it was a case of "two different years" for the company.
As well as the absence of SSIAs from the latest numbers, he highlighted a change in the tax timetable for pensions that resulted in new pensions business normally conducted in January being delayed until later this year.
New single-premium pension sales amounted to £33 million in the quarter, up just slightly on last year's £32 million. New regular pension sales were flat at £12 million.
Sales of investments such as unit-linked and with-profit products were also weak, contributing to a 69 per cent fall in life single-premium sales, which came in at £19 million.
Customers are delaying investment decisions until they feel more confident about market conditions, according to Mr Veitch.
"A lot of money is sitting in bank accounts that doesn't want to sit in bank accounts for the long term," he said.
The main highlight in the first quarter came in protection business, where sales rose by 42 per cent to £3.1 million.
Mr Veitch said he expected this business to hold up over coming months.
He also highlighted potential growth in pensions, as the launch of personal retirement savings accounts raised awareness in the area.
Davy analyst Ms Emer Lang said the Hibernian numbers offered the first concrete evidence of the difficult environment facing the Irish life sector this year.
Aviva posted global first-quarter new business sales of £3.8 billion, up slightly on a year earlier. However, Aviva said the outlook remained challenging.
