Prudential has reported an 8% increase in total UK sales of £617M for the first nine months of the year, driven by individual annuities, with-profits bonds and bulk annuities, reports Fundweb.
But the insurer has warned of “short-term dislocation in the market” ahead of the Financial Services Authority’s retail distribution review (RDR) and predicts bond sales will take a hit in the latter part of this year and into next year.
Pru’s Q3 interim statement, published today, shows new business profit is up 17% to £227M, compared with £194M at the same time last year.
Individual annuity sales on an APE basis rose 25% to £166M. Of the total individual annuity sales, £104M came from internal vestings, which were 18% higher than last year owing to a higher number of customers retiring and higher average fund values.
Sales of external annuities of £62M were 41% higher than the same time last year.
The PruFund range made up 76% of with-profits bond sales. Pru attributes the performance of the PruFund range to the optional guarantees features but says sales may also have been driven by the RDR in the run-up to the ban on commission.
The Pru said: “Distributors are adjusting their business models ahead of the implementation of the new regulatory framework. This is likely to lead to some short-term dislocation in the market.
“While our business is on track to be ready for the onset of RDR, we expect investment bond sales in particular to be impacted in the latter part of 2012 and into 2013 as distributors adapt to the new regulatory environment.”
Corporate pensions sales of £148M in the first nine months of the year were 22% lower than the same period last year.
It said sales last year were pushed up by new defined contribution members joining schemes following the closure of a number of defined benefit schemes operated by existing clients.
Other product sales, including individual pensions, PruProtect, PruHealth and offshore bonds totalled £101M, 11% higher than the same time last year.
Individual pensions sales including income drawdown of £59M rose 9% from last year.
M&G, Pru’s asset management arm, has seen inflows rise 329% to £11.3Bn during the first nine months of the year, up from £2.6Bn for the same period in 2011.