Ark Life, AIB's life assurance and pensions company, has reported growth of 30 per cent in its pensions business in 2004. However, sales of single premium investments have fallen 16 per cent.
Overall, sales fell slightly from €103.7 million in 2003 to €100.2 million this year.
The sales figures were measured by annual premium equivalent (APE), which is 10 per cent of the value of new single premium sales added to the value of regular premium sales.
Mr Billy Finn, managing director of Ark Life, said the performance reflected the company's focus on pensions. Mr Finn attributed the fall in single premium investment business to Ark Life's decision to withdraw from the guaranteed bond market in the middle of the year.
"This was a major area of business for us but, in the face of continued low interest rates, it did not offer investors adequate returns on their investment. However, the very strong pensions performance meant that we maintained our business performance in line with 2003," Mr Finn said.
Sales of new regular premium pensions increased from €29.7 million in 2003 to €36.2 million, while new single premium pensions business doubled from €35.6 million in 2003 to €70.2 million last year.
Mr Finn said Ark Life was satisfied with its performance in the Personal Retirement Savings Account (PRSA) market, where it achieved sales of €21 million.
He said he believed the PRSA performance reflected Ark Life's decision to introduce only a standard PRSA, which he said was easily understood by pensions savers.
However, Mr Finn said the PRSA market in general was not achieving the sales levels that would enable the Government to achieve its target of improving private pensions coverage from 50 per cent to 70 per cent of the workforce by 2006. Mr Finn said there was a need to re-examine the options available to people saving for retirement.
"Our concern is that a new generation of savers are being denied the fiscal incentives which it is generally recognised are needed to encourage long-term savings. There is a need to introduce some sort of tax incentive in this year's Finance Bill ," he said.
