York Guides

(Yorkshire Post)

The life insurance market is particularly competitive as more players fight for less business.
Gary Withers, chief executive of York-based Norwich Union Life, said that business had reduced by around 10-15 per cent as fewer people take out life insurance following the decline in the housing market.
"When people buy a house it tends to be one of the moments when they decide to take out life insurance as well. As the housing market has slowed down, so has demand for insurance."
At the same time the group has faced increasing pressure from smaller rivals.
"There are a lot of me-too products around," said Mr Withers. "They are trying to steal market share from us, but we won't give ground. We will lower our prices. We can afford to lower our prices more than rivals."
However the decrease in prices will inevitably hit margins in the second half.
The group's other big business – pensions – has also faced a decrease in demand.
"Pensions are not as buoyant as they need to be. People are not saving enough," said Mr Withers.
Norwich Union is counteracting this slowdown by focusing on more lucrative products such as sorting out a consolidated pension for wealthier people. Many affluent people have three or four pension schemes and Norwich Union offers a product whereby they can roll them into one scheme.
Yesterday Aviva said it had made half-year profits of £1.32bn following strong performances in general insurance and at its European arm.
The 21 per cent improvement on a year earlier was hailed as a very good result by Aviva, but it included a lower profits figure from the company's life and pensions business in the UK.
The RAC, which was bought for £1.1bn earlier this year, also featured in the company's results for the first time, with the integration of the motoring organisation showing good growth.
The profits figure for the six months to June 30 was at the top end of market expectations, which ranged between £1.14bn and £1.32bn.
In general insurance, which focuses on cover for household and motoring, Aviva said its UK business produced operating profits of £431m, up from £364m.
The company said the improvement reflected disciplined underwriting and efficiency savings following a drive for a £240m reduction in annual claim costs.
The group benefited from better-than-expected weather over the winter, which offset the storms in January.
Norwich Union achieved a five per cent increase in personal motor rates and a six per cent rise in homeowner rates.
Chief executive Richard Harvey said: "This is a very good set of results, delivered by managing our business for value. Our balanced international portfolio of life and general insurance businesses has enabled us to sustain real growth momentum."
Greig Paterson, an analyst with Keefe, Bruyette & Woods, said: "These are strong results, beating the market's expectations."
Norwich Union also said it had signed a distribution agreement with Co-operative Insurance Society, providing four products to complement CIS's existing product range.