Zurich Life posts 20% increase in new pension sales for 2008

ZURICH LIFE Ireland, the company formerly known as Eagle Star Life, posted a 20 per cent rise in new pension sales last year, outperforming a decline of 8 per cent across the overall pensions market, it said.

The State’s fourth largest life and pensions company said new pension sales rose to €106 million while the annual premium equivalent value of new business – the benchmark measurement used to gauge activity in the industry – grew 1 per cent to €218.5 million.

This growth helped lift Zurich’s market share by over one-third – to 12.6 per cent last year, from 9.4 per cent in 2007, the company said in its full-year results.

Chief executive Michael Brennan said the rebranding of Eagle Star Life would be completed this year and had benefited last year from being associated with such a “large and strong group”.

He admitted being surprised at the strength of sales of protection-related products, such as mainstream life, term and critical illness insurance last year.

“We expected this sector to fall because it is directly related to the property market in terms of mortgage protection but that was not the case,” he said.

Although its parent Zurich Financial Services said yesterday it was looking to cut costs, Mr Brennan says there are no plans to reduce the company’s 550-strong workforce here.

“We expanded the workforce last year and have no plans to reduce it,” said Mr Brennan.

Zurich’s single premium pension sales grew by 11 per cent to €465.8 million last year while sales of personal retirement savings accounts (PRSA) rose 2 per cent.

This brought Zurich’s market share in this category to 28 per cent. However, new business margins after tax fell 4 per cent to 19 per cent, a level which Mr Brennan described as “satisfactory”.

He said it was difficult to make predictions for 2009 given the volatility in the economy but was confident Zurich would develop the business and improve its market share.

The Zurich group said fourth-quarter profit fell 87 per cent following writedowns and losses on investments.

The group said it is doubling the target for savings cuts this year to €311 million after its revenues were hit by €855 million in markdowns on stocks, bonds and hedge funds last quarter.