Press Release

ABI publishes long-term business in force figures

4 June 2009

The recession, and the Government's recent changes to Capital Gains Tax last year, are continuing to have an impact on the long-term insurance business, although the total amount invested in pensions is at a record level, according to figures released today by the ABI.

The ABI's provisional figures show that total net premium income in 2008 for life insurance and pensions was £97.7bn, down 2% from £100.2bn in 2007. Pensions fared well, with net premium income up 18% to £57.5bn, but life insurance fell 22% to £38.4bn. Benefits paid to customers rose from £113.0bn in 2007 to £126.8bn in 2008, an increase of 12%.

Dr Rebecca Driver, the ABI's Director of Research and Chief Economist, said:

"Against the background of a recession, it is encouraging that net pension income has gone up. The fall in life insurance investments was to some extent unavoidable. The Government's ill-judged changes to Capital Gains Tax have hit the insurance bond market, and we are seeing the effects of those changes here."