Sales at Friends Provident down by 40%
Friends Provident, the life insurer, has experienced a 40 percent fall in life and pension sales for the first quarter of 2009 to £109 million, as the recession has put off potential customers in saving for the future.
Following the reported results, shares in Friends Provident lost 8 percent.
In a bid to rectify losses, the company withdrew from less profitable areas of the insurance market and consolidated operations, as forecasts were indicating that sales would be close to bottom estimates but the final results were far worse than expected.
Last year, the group posted a £541 million net loss with shares plummeting by 28 percent. So far in 2009, the closure of a number of offices and hundreds of job cuts has resulted in a saving of £31 million a year.
As part of the UK’s big five in life and insurance, Friends Provident also announced a new deal with Tesco’s personal finance division to be the exclusive provider of life insurance protection.
This new agreement will come into play at the end of 2009 but it should help to boost sales and is a big coup which has helped to soften the blow of the results.