Life insurance sales tumble 14pc after short-lived recovery
THE life insurance market slumped into double-digit decline in the three months to September, abruptly ending a tentative recovery earlier in the year.
New industry figures circulated by consultants Milliman in recent days show new life insurance sales fell by 14pc in the third quarter of the year.
The performance is worse than the 1pc fall in the six months to June and brings the year-to-date performance to a 5pc fall.
"It's a worrying trend for life companies and brokers as we approach peak pension's season," said one senior life insurance figure.
"Most of us had expected the recovery to commence by the end of this year -- it doesn't look like that's going to happen now."
The third quarter swing took its toll right across the life insurance industry, with all major categories of business putting in a worse performance in the most recent period.
In pensions, single premium sales were down 20pc in the three months to September, reversing a 10pc gain in the first six months of the year.
Industry sources pointed out that single premium pensions put in a particularly strong performance in the third quarter of 2009, as fears of imminent tax changes prompted a deluge of contributions.
Regular premium pensions also took a hit in the third quarter, with contributions falling by 12pc, a marked acceleration on the 1pc fall in the first half of the year.
Employment numbers are the most direct link to regular premium pensions, but economic concerns also feature as people become reluctant to put money out of reach.
The June-September figures also show a marked fall in the sale of savings and investment products, which appears to contradict the "panic saving" trend that's prevailed through the recession.
Sales of single premium life insurance products -- essentially investments -- rose only 1pc in the third quarter against a 60pc rise in the first six months of the year.
Regular premium life insurance policies were also weaker, rising 1pc against a 24pc rise in the first six months. Protection business, including mortgage insurance, was down 12pc against an 8pc fall in the first six months.
The only bright area was 'group risk', a highly volatile sector that includes big ticket company-administered pension funds which change provider from time to time.
New group-risk business was down only 30pc in the third quarter of the year, against a 41pc fall in the first six months.
Overall, the third quarter's new business sales came in at €222m while 2010's running nine-month tally is €707.4m.