No protection upturn soon - Friends Prov

Friends Provident says it sees no near term improvement in the UK protection market after announcing a fall of 10% on individual sales for the last six months.

The provider revealed new protection business worth £18m (based on annual premium equivalent calculations) was written in the first half of 2010, down from £20m on the same period last year.

However the Resolution owned insurer saw its group protection figures double to £4m from £2m in 2009.

It says the drop in sales is due to "a protection market that is still subdued and reflects the poor economic conditions and low housing sales volumes, and this situation is not expected to improve in the near term."

Overall, Friends Provident's UK life and pension sales rose 6% in the first half of the year, helping to boost the group's pre-tax profits to £157m.

Its life sales climbed to £203m in the six months to 30 June, up from £191m for the same period in 2009, and total first half sales were up 42% at £458m on an APE basis, compared to £322m for the same period of 2009.

The take over of Axa's UK Life business by Resolution is expected to be completed in September, followed by an immediate integration with Friends Prov and the launch of a new Friends Life brand early next year.