SALES OF life and pensions products declined by 8 per cent last year, continuing the decline of the previous two years, as investors opted to hold cash and avoid falling stock investments.
Industry figures from actuarial consultants Milliman showed sales of annual premiums of new business – the benchmark gauge of activity in the sector – fell to €930 million last year from just over €1 billion the previous year.
Annual premiums include savings and protection products and life and pensions products.
The figures, which are circulated in the industry, cover nine life and pensions companies operating in the Irish market.
The 8 per cent decline in life and pension sales last year followed a contraction of 30 per cent in 2009 and a fall of 6 per cent the following year as the economic crisis deterred people from setting aside cash in savings or pensions.
Overall sales of single premium products declined 1 per cent to €4.8 billion last year.
Sales of single premium pension products rose 2 per cent to €3.5 billion over the year, despite investors fleeing lump-sum investments for cash due to the eurozone debt crisis.
However, single premium sales in the life business were down 8 per cent to €1.3 billion in the year.
Investment-only pension sales rose 8 per cent to €3.27 billion.
Annual premium products in pensions declined 17 per cent, while annual premium life sales fell 11 per cent over the year.
A further breakdown of the life business shows annual premium sales of savings products fell 26 per cent to €23 million, while sales of protection products declined by 7 per cent to €113 million.
Declining equity investments drove investors out of life and pensions products and into cash.
Global stock markets rose in the final quarter of last year, but fell overall for the year. The Iseq index of Irish shares rose 6 per cent in December to finish the year with a gain of just 0.6 per cent.
The low volume of trading in Irish shares also reflected the lack of appetite for equity investments.
The latest life and pensions figures from Milliman illustrate the challenges facing the Government as it attempts to sell Irish Life and Permanent, the biggest player in the life and pensions market.
The owner of Canada Life, Great West Life-Co withdrew from its purchase of Irish Life at the eleventh hour in November over concerns about the deteriorating debt crisis in the eurozone.
Minister for Finance Michael Noonan said yesterday the Government would agree a plan for the future of Irish Life and Permanent by the end of April.
The remaining €1.3 billion of the €4 billion required by the company under the Central Bank-directed recapitalisation must be be invested by the end of June.
