Friends picking up customers again

FRIENDS Provident, the life insurer which completed a £4bn float in July, has revealed early signs of a turnaround in its struggle for new business.

It said new life and pensions business had continued to recover in the three months to 30 September, rising 3% from the second quarter and 14% from the first three months of the year.

The total figure for the nine months of £245.9m was 10% lower than the same time last year. But analysts said the previous figures were boosted by investors who took out policies in a bid to qualify for the shares and cash handout that accompanied Friends' demutualisation.

The market was also encouraged by figures showing business from life and income protection jumped 25% in the nine months to £25.8m.

There was a 34% rise in new group pensions business to £95.6m. Merrill Lynch insurance analyst Roman Cizdyn estimated the shares were trading at an 8% discount to their embedded value for this year compared with the premiums of up to 60% enjoyed by competitors such as Legal & General and CGNU.

'But the market will want to see a bit more evidence of actual business coming through before it reacts,' he said.