The recession, and the Government's recent changes to Capital Gains Tax last year, are continuing to have an impact on the long-term insurance business, although the total amount invested in pensions is at a record level, according to figures released today by the ABI.
The ABI's provisional figures show that total net premium income in 2008 for life insurance and pensions was £97.7bn, down 2% from £100.2bn in 2007. Pensions fared well, with net premium income up 18% to £57.5bn, but life insurance fell 22% to £38.4bn. Benefits paid to customers rose from £113.0bn in 2007 to £126.8bn in 2008, an increase of 12%.
Dr Rebecca Driver, the ABI's Director of Research and Chief Economist, said:
"Against the background of a recession, it is encouraging that net pension income has gone up. The fall in life insurance investments was to some extent unavoidable. The Government's ill-judged changes to Capital Gains Tax have hit the insurance bond market, and we are seeing the effects of those changes here."
- ENDS -
Notes for Editors
1. Enquiries to:
Jonathan French 020 7216 7392 (Mobile: 07958 330 480)
Malcolm Tarling 020 7216 7410 (Mobile: 07776 147 667)
Erfan Hussain 020 7216 7411 (Mobile: 07712 841 184)
Kelly Ostler-Coyle 020 7216 7415 (Mobile: 07968 364 302)
2. The ABI is the voice of the insurance and investment industry. Its members constitute over 90 per cent of the insurance market in the UK and 20 per cent across the EU. They control assets equivalent to a quarter of the UK's capital. They are the risk managers of the UK's economy and society. Through the ABI their voice is heard in Government and in public debate on insurance, savings and investment matters.
3. An ISDN line is available for broadcasts.
4. More news and information from the ABI is available on our web site, www.abi.org.uk.More Articles by Association of British Insurers (ABI) ...