Insurer L&G is looking at a bounce back in core markets
The group said that its savings and protection and annuities sectors are expected to rally in 2010.
It also announced new distribution arrangements with Skipton Building Society, Saga and Northern Rock in an effort to boost sales.
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Hide AdThe company, the UK's fifth-largest life insurer, reported a seven per cent fall in full-year 2009 sales to 1.39bn, in line with expectations.
Chief executive Tim Breedon said he expects the core UK market to begin to recover as housing sales begin to slowly pick up and profitable bulk annuity deals return.
"There is a bit more stability, people will plan a little bit more for the long term," he said. "Don't expect this rebound to be spectacular, but after a period of contraction, the markets will resume their growth path."
Mr Breedon said the third quarter last year may have been the low point for UK life insurance sales.
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Hide AdL&G said it beat a 450m target for its UK business in 2009, thanks to cost cuts, improved annuity pricing and growth in assets under management. The company generated more than 650m of cash from its UK business.
In addition a 50m cost savings target was exceeded by 15m, meaning it delivered more than 65m in savings over the year. The insurer said it would continue to reduce costs, but at a lower level.
The positive news on cash revived hopes of a higher dividend payout. L&G said its UK risk activities, which include annuities and protection sales, fell 25 per cent last year. The fall was blamed on the weakness of the economy, a slowdown in bulk deals and the drop in house sales.
The company said it maintained its number one position in the UK protection market, despite a 13 per cent drop in full-year new business sales to 180m. This reflected conditions in the house market, but L&G reported progress in selling high net worth, family and business protection products.
Sales also benefited from an ongoing relationship with Nationwide Building Society.