CNP Assurances new business slowdown continues in first-half 2008

CNP Assurances, the leading personal insurer in France, with operations in the rest of Europe and in South America, has announced its premium income figures for the second quarter and first half of 2008, whereby new money declined 13.9% year-on-year in the second quarter, marking a slight improvement compared with the 19.1% decline in the first three months of the year.
Over the first half, new money was down 16.8% compared with the year-earlier period.
In France, first-half premium income excluding Fourgous transfers was down 11.6%, outperforming the 14% decline in the bancassurance sector.
Operations in Brazil reported very strong growth for the period, with premium income gaining 39% year-on-year.
Premium income in Italy fell 28.4% during the first half, tracking the bancassurance sector in a persistently challenging life insurance market.
"In a difficult financial environment, the downward trend in CNP Assurances' premium income observed in the first quarter slowed in the second, despite intense competition from easy-access savings products,” explained Gilles Benoist, Chief Executive Officer.
“I am also very satisfied with our highly positive performance in Brazil. Based on the Group's solid fundamentals, we expect first-half profit attributable to equity holders of the parent to be stable and are maintaining our full-year target of double-digit growth."
Premium income for the first six months of the year amounted to €14,063.5 mln under IFRS, down 19.2%. The rate of decline slowed in the second quarter, however, easing to 15.3% (to €6,425.3 mln) from 22.1% in the first three months of the year.
Premium income contracted 14% in the second quarter versus 19% in the first, resulting in an average decrease of 16.8% (to €14,750.3 mln) over the first six months of the year. In both France and Italy, the decline was attributable to the reduced attractiveness of unit-linked products, which were impacted by the falling stock markets, and to strong competition from easy-access savings products offering high interest rates that were raised yet again in the second quarter.
First-half revenue growth was held back by the savings business. On the other hand, sales of pure insurance products, which generate very high margins, continued to expand rapidly, with loan insurance premiums up 9.7%, property and casualty premiums up 5.2% and personal risk premiums up 4.6%.
In the savings and pensions segment, unit-linked sales fell 30% to €3,070.7 mln for the Group as a whole and by 44.5% in France, roughly in line with the French market's 40% decline.
First-half 2008 premium income in France amounted to €12,319.3 mln, down 17.7%.
The decline mainly concerned the savings business, with the higher-margin personal risk and loan insurance businesses experiencing robust growth.
This outperformance was driven by the impact of the marketing campaigns organised since April. Net new savings and pensions money remained high at €3.5 bln. Savings and pensions payouts declined by 5%.
Held back by stock market conditions, unit-linked sales fell 44.5% to €1,325 mln, tracking the 40% decline in the French market.
Premium income generated by La Banque Postale amounted to €4,900.4 mln, compared with €6,505.5 mln in the first half of 2007, which saw 25.2% growth versus first-half 2006. The decline was mainly due to the lower volume of Fourgous transfers, which amounted to €216 mln versus €1,056 mln in first-half 2007. Sales of all products other than savings contracts (pension, personal risk and loan insurance products) continued to grow. Sales of contracts through La Banque Postale Prevoyance rose 3% in the second quarter, after surging an exceptionally strong 70% in second-quarter 2007.