Hibernian Life & Pensions has reported a 29 per cent drop in sales in 2003. The value of new business fell to €115.4 million from €162.3 million in 2002.
But the firm said it had increased its market share despite tough market conditions. It is now the third-largest life assurer based on new business, overtaking Ark Life.
Hibernian's 2002 sales figures include €38.8 million in once-off Special Savings Incentive Account (SSIA) business. When the effect of the Government savings scheme is excluded, new business sales fell by 5 per cent.
Continuing stock market uncertainty badly affected single premium investment sales, which dropped sharply to €73.9 million from €249.2 million the previous year.
Mr Grant Barrans, managing director of Hibernian Life & Pensions, said the market was "still on the floor" but beginning to show signs of life as investors' confidence returned.
There was better news for Hibernian's mortgage protection and term life assurance business, which grew by 33 per cent to €19.9 million.
Single premium pensions business increased by 14 per cent on 2002. Regular annual contributions to personal pensions were hit, however, following the introduction of Personal Retirement Savings Accounts (PRSAs) in April.
Mr Barrans said PRSAs were one of the least positive areas for new sales.
Compulsory pensions may be necessary if the Government is to achieve its target of increasing the percentage of workers with their own pensions from 50 to 70 per cent, he said.
"No amount of tinkering with the product is going to make a difference. Most normal people have 101 things competing for their spending power."
A massive education campaign could help, but evidence from other countries showed "a degree of compulsion" was required to boost pensions coverage, he said.
Regular premium group pensions sales rose by 28 per cent.
Mr Barrans said one of the positive effects of PRSA legislation was that employers had been prompted to offer employees access to group schemes rather than appoint a PRSA provider.
There was also some pent-up demand in the market because 12-18 months ago companies had been putting off committing to pensions, he added. "Corporate Ireland is feeling good," he said. Overall, regular premium pensions sales rose slightly from €64.5 million to €65.6 million.
