L&G sees pick up in sales

FRESH signs of a better year ahead for the life insurance sector emerged today as Legal & General said UK life and pension sales were gaining momentum.

The group, currently fighting claims that it mis-sold mortgage endowments in the late 1990s, suffered a 6% fall to £696m in new individual business in the UK last year, on an annual premium equivalent basis.

But it posted a 6% jump in the fourth quarter as its growing annuity side made up for a slide in sales of annual premium pensions and single premium bonds.

'In the second half of 2003 our core UK individual business returned to growth,' said chief executive David Prosser.

'We believe 2004 will see further recovery in equity markets and it is this steady progress which will restore consumer confidence in savings products.'

Prosser's optimism matches that shown by Aviva and Prudential last week. Aviva suffered a 13% slide in UK new business last year while the Pru's UK sales fell 19%.

L&G has weathered the bear market better than its rivals by switching its attention from with-profit bonds and individual pensions to a string of distribution deals with banks.

The group yesterday said it 'wholly refuted' a report its executives knew they were mis-selling mortgage endowments in the late 1990s. It is awaiting a tribunal appeal after challenging enforcement action by the Financial Services Authority over such sales between 1997 and 1999.