Life Business Review
| Key Performance Indicators | ||
|---|---|---|
| 31 Dec 2008 | 31 Dec 2007 | |
| Operating profit (EV basis) | €284m | €346m |
| Embedded Value | €1,649m | €2,047m |
| Life and investment margin | 14.0% | 15.3% |
| Life sales (APE) | €511m | €673m |
| Investment inflows (gross) | €203m | €341m |
| Life market share | 31.9% | 30.1% |
| Customer satisfaction Index (Retail Business) | 80.1% | 80.0% |
| Solvency capital cover | 1.6 times | 1.6 times |
2008 was a difficult year in the life market in Ireland with the impact of falling global investment markets weighing heavily on investor sentiment and confidence. Against this backdrop, the life assurance activities of the group delivered a robust operating performance in 2008.
While sales of retail investment products reduced significantly Irish Life maintained its leading market franchise recording strong pension and protection product sales and growing its overall life market share. In addition Irish Life Investment Managers enjoyed strong institutional inflows of €2bn (2007: €3.4bn) and increased its market share to almost 30% of domestic funds under management.
Life operating profits, on an EV basis, were down 18% to €284m, principally due lower new business earnings as a result of a lower level of sales and reduced margins. Earnings from the in-force book held up well but persistency experience deteriorated, particularly on unit-linked investment products, as customers lost confidence in investment markets and / or needed cash to meet their own liquidity requirements.
The embedded value of the life business was impacted by the falls in investment markets and asset values and declined by circa 20% over the year. Notwithstanding these movements the capital position of the life company remained very strong with the minimum EU solvency requirement covered 1.6 times at the year end.
