Group capital position further strengthened
• Pro-forma FGD surplus at 31 March 2009 of £0.9 billion (31 December 2008: £0.7 billion)
• Individual businesses remain well capitalised
Group sales resilient in light of market conditions
• Long-term savings sales down 14% to £315 million: single premium business affected by low consumer confidence
• Bermuda closed to new business and US Life sales reduced in line with strategy
• Unit trust sales down 14% to £1,458 million: shift by consumers to lower-risk products
• Strong sales growth in South Africa and Nordic, but reductions in UK and International
Solid net client cash flows (“NCCF”) and funds under management (“FUM”) relative to fall in equity markets
• NCCF of £(2.9) billion: good inflows in Europe of £0.6 billion, but certain PIC funds withdrawn in South Africa as anticipated
• FUM down 6% to £245 billion from 31 March 2008: significantly less than the reduction in market levels due to solid investment performance and favourable currency effects
Further de-risking of Bermuda and US Life businesses
• Bermuda hedging effectiveness further improved to 95% and soft-close of higher-risk funds
• US Life operations restructured and product range significantly rationalised in line with plan
• Increased cash holdings in US Life asset portfolio
• Quarterly impairment charge in US Life significantly declined and no bond defaults experienced.
Julian Roberts, Group Chief Executive, commented:
“The Group has delivered a solid performance for the first quarter despite the operating environment being profoundly different to the same period last year. Sales were affected by a shift in consumer sentiment, the closure of Bermuda to new business and the deliberate downsizing of our US Life business. Our Nordic and South African businesses, where we have significant scale, once again performed well.
Funds under management have held up well over the past year relative to the marked fall in equity markets, and we continue to tighten expenses across the Group.
Strengthening our capital position remains a key priority for the Group and I am pleased to report that our FGD surplus now stands at £0.9 billion, a significant increase on the year end principally as a result of accrued profits and a Nedbank subordinated debt issue.”
Get the latest issue of FAnews