Norwich Union Surpasses Expectations with Strong Life and Pensions Business

Strategic Insights -

Norwich Union, one of the UK's largest insurance companies, has reported a significant increase in profits for the year to December 31, despite facing intense competition in the UK non-life insurance market. The group's net income from motor and property insurance dipped, but this was more than offset by a substantial boost in its life and pensions business. The company's pre-tax profit rose to $722 million, up 36.7% from the previous year's $528 million, exceeding analysts' expectations of around $610 million.

Key Takeaways:

  • Norwich Union's pre-tax profit for the year to December 31 rose to $722 million, a 36.7% increase from the previous year's $528 million.
  • The group's life and pensions business saw a significant increase in gross premium income, rising to $2.96 billion, a 23% increase from 1996.
  • New business in the UK life and pensions sector grew by 27% to $290 million, with unit trust and PEP sales almost doubling to $85 million.
  • The company's Norwich Property Trust and Norwich Global Tracking PEP were particularly successful, contributing to the growth in the life and pensions segment.
  • Despite facing a very competitive UK non-life insurance market, Norwich Union managed to achieve profitable growth in its household account, despite high subsidence and weather-related claims.
  • Internationally, the group has turned around a number of loss-making businesses, with equivalent premium growth increasing by 29%.

Statistics:

  • Pre-tax profit for the year to December 31: $722 million
  • Increase in pre-tax profit from the previous year: 36.7%
  • Gross premium income from life and pensions business: $2.96 billion
  • Increase in gross premium income from life and pensions business from 1996: 23%
  • Sales of unit trusts and PEPs: $85 million (almost doubling from the previous year)
  • New business in the UK life and pensions sector: $290 million (up 27% from the previous year)
  • Equivalent premium growth internationally: 29%

Sources:

  • "Norwich Union Surpasses Expectations with Strong Life and Pensions Business" by Ian Burrell (exact original wording)
  • No additional sources mentioned in the original text.