Prudential’s UK sales decrease 20%

by Gill Montia

Story link: Prudential’s UK sales decrease 20%

Prudential, the UK’s second largest insurer, recorded a 20% decrease in UK sales in the nine months to the end of September 2007.

The group’s overseas business is expanding rapidly in some regions, with Asian sales increasing 48% during the period and sales in the US increasing 20%.

The company’s chief executive, Mark Tucker, described the domestic market as a “challenging environment”.

The insurer has been undertaking a review of its UK business and in March of this year announced a number of initiatives aimed at regaining market share.

These measures include the possibility of returning to policyholders some of Prudential’s estimated £9 billion inherited estate.

Analysts are uncertain as to whether the changes will be successful and UK sales are still falling.

However, the 20% decrease, to £529 million on an annual premium equivalent (APE) basis, is attributed in part to Prudential’s loss of a contract with Lloyds TSB.

The agreement allowed Prudential to sell protection insurance products via the bank and the business contributed £45 million to the Pru’s 2006 UK sales figures.

On a more positive note, individual annuity sales in the UK increased 14% during the first nine months of this year, to £214 million. Retail sales were up 8% to £523 million (APE).

Mr Tucker is forecasting net growth of between 5% and 10% in 2008.