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British insurance

firms get a boost

LONDON: Chief executives at some of Britain's leading insurance firms have good reason to be more optimistic than they were a year ago.

First quarter figures out this week show that volumes, particularly in the life insurance sector, are up for many big providers after strenuous efforts to cut costs and prices.

"If you take the independent financial advice (source of business) (IFA), we are writing about 30 percent more business this year than last year," the chief executive of UK operations at mutual life company Standard Life, Jim Stretton, said this week.

Standard Life relies on the IFA for around 85 percent of its business. The rest is sold direct by Standard's own sales force.

Stretton said that the areas of growth, which underpinned the sharp increase in its life sales, were pensions and annuities. The housing market by contrast is still very weak.

Other insurers also offered evidence of a significant upturn in life sales this week with Prudential Corp announcing on Wednesday that turnover was 12 percent higher and forecasting improved growth for the rest of this year.

The only good news from composite Commercial Union, which held its annual meeting on Tuesday, came from its life arm, where sales were up and profits expected to grow this year.

"All major western countries are facing the problem of an ageing population that will become an increasing burden on the state, a fact well recognised by governments who are trying to shift that burden onto the individuals and the private sector."

The Association of British Insurers (ABI) is looking ahead to government proposals on long term care due in a few weeks.-Reuter