Pru sales take a 14% dive

SAVERS continue to shun traditional share-market linked investments despite the rally in share prices, new business figures from Prudential have revealed.

The life assurer put a brave face on a 14% slide in overall sales of insurance and investment products to £1.2bn in the nine months to September.

Chief executive Jonathan Bloomer said markets were difficult and consumer confidence in Britain had not fully recovered.

'However, market conditions are beginning to stabilise and we are now seeing signs of improvement and the emergence of some positive trends.'

These included increased sales of corporate pensions in the UK and strong sales of annuities in the US.

The overall sales figure - based on the widely used annual premium equivalent measure - showed a worsening from the half-year position, when sales fell 4%. Sales in the UK and Europe fell by 18% and in the US by 26%. Asian sales rose by 9%.

Bloomer said Britain had been hit by weakness in the with-profits bond market. Sales through independent financial advisers slumped by 38% to £208m, while direct sales improved by 15% to £243m.

M&G, the Pru's fund management arm, posted gross fund in-flows of £3bn for the first nine months, a 1% increase.

In July the Pru slashed its dividend for the first time since the First World War to give itself more financial flexibility, after reporting a 27% fall in first-half operating profit to £397m.