Committee Reports::Report No. 01 - Irish Life Assurance plc::02 February, 1988::Appendix


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Committee Reports > List of Committees > Joint > 1988 > Committee on Commercial State-Sponsored Bodies > Report No. 01 - Irish Life Assurance plc

Appendix 2 (i)

NEW LIFE BUSINESS WITHIN IRELAND 1979 - 1986

(A) ORDINARY LIFE ASSURANCE

(i) Life Assurance Annual Premiums (Net of reassurances) 1979 - 1986

		£ MILLION
	1979	1980	1981	1982	1983	1984	1985	1986
Irish Life	14.16	21.91	25.41	24.32	31.90	32.73	35.71	38.36
ICI Life*	0.30	1.04	1.91	2.11	3.32	4.82	4.26	5.81
Total companies incorporated in Ireland	19.62	28.25	37.41	37.41	50.16	54.85	60.90	66.18
Not incorporated in Ireland	8.15	12.33	14.41	13.20	14.36	17.18	20.23	21.01
Total Irish Market	27.77	40.58	51.82	50.61	64.52	72.03	81.13	87.19

(ii) New Single Premium Business

Irish Life	31.20	28.73	69.68	61.98	86.99	165.32	134.39	211.69
ICI Life*	3.83	6.47	13.78	18.71	68.12	68.30	6.51	50.75
Total	52.68	56.39	125.18	144.26	340.81	680.01	571.60	506.80

(B) NEW INDUSTRIAL ASSURANCE BUSINESS

Irish Life	1.59	1.93	1.95	2.43	2.68	3.34	3.07	2.79
New Ireland Assurance Co.	0.76	0.84	1.00	1.01	1.43	1.37	1.33	1.19
Companies incorporated outside Ireland	3.16	4.27	4.30	4.51	3.92	4.05	4.15	4.53
Total	5.51	7.04	7.25	7.95	8.03	8.76	8.55	8.51

Source: Blue Book

Appendix 2 (ii)

UNIT LINKED FUND SURVEY, 1 JANUARY, 1988

FUND TYPE	Annualised % Growth in Unit Value - 1 January, 1988
MANAGED	1 Year	2 Year	3 Year	4 Year	5 Year
	% pa	% pa	% pa	% pa	% pa
Abbey Life 1	6.1	6.4	13.8	11.4	14.0
Abbey Life 2	-	-	-	-	-
Abbey Enterprise	-	-	-	-	-
IBI/CLI Managed	10.8	11.8	14.9	12.0	12.6
IBI/Lifetime
Managed Security	-	-	-	-	-
Managed Growth	-	-	-	-	-
Managed Opportunity	-	-	-	-	-
Friends’ Provident	10.5	12.1	15.4	-	-
Irish Life Man. 1	2.9	8.4	11.4	9.0	12.0
Stable Man.	9.5	10.2	-	-	-
Active Man.	12.4	17.6	-	-	-
Venture Man.	7.3	17.1	-	-	-
Hibernian Life Man.	6.1	9.5	13.2	10.8	12.7
Hibernian Hi-Growth	-	-	-	-	-
New Ireland Man.	13.4	13.0	15.5	12.2
New Ireland Evergreen 1	8.3	10.1	10.5	9.5	11.3
Norwich Union	1.5	8.8	11.9	10.6	12.9
Prudential Life Old	9.4	12.5	14.4	11.1	12.9
Prudential Life Balanced	9.2	-	-	-	-
Prudential Life Opp.	3.1	-	-	-	-
Royal Life	-	-	-	-	-
Shield Life	12.7	14.4	17.9	14.3	16.6
Standard Life	11.2	12.2	15.7	12.4	17.8
Sun Life Canada	11.7	10.7	17.1	13.2	-
EQUITY
Abbey Life	-7.2	5.9	18.3	15.1	20.6
Abbey Life Equity 2	-	-	-	-	-
Abbey Life Int. Equity	-	-	-	-	-
Abbey Irish Equity	-	-	-	-	-
IBI/Lifetime Equity	-	-	-	-	-
Friends’ Provident	-0.1	12.6	16.5	-	-
Irish Life Blue Chip 1	-9.4	7.1	11.5	9.2	15.7
Irish Life Int. Equity	7.9	15.2	-	-	-
Irish Life Irish Equity	5.8	31.9	-	-	-
New Ireland	12.2	12.5	17.0	12.5	-
Norwich Union	1.2	12.6	16.4	13.3	18.9
Prudential Life	-3.5	13.1	14.0	10.6	14.9
Prudential Life 1986	-3.5	-	-	-	-
Prudential Life Equity 2	-	-	-	-	-
Royal Life	-	-	-	-	-
Standard Life	-3.4	12.8	16.2	12.5	21.3
Hibernian Life	-5.1	10.5	12.6	9.0	11.6
CLI/IBI Leading Companies	-	-	-	-	-
Source: Guinness+Mahon Financial Services Limited
CASH
Abbey Life 1	8.5	6.8	7.6	7.6	8.1
Abbey Life 2	-	-	-	-	-
IBI/CLI Money	13.0	9.6	10.0	9.0	-
IBI/Lifetime Cash	-	-	-	-	-
Friends’ Provident	6.5	6.2	6.6	-	-
Irish Life Cash	9.9	10.4	11.0	10.5	11.3
Irish Life Deposit	9.6	10.2	10.7	-	-
Hibernian Life	9.3	7.3	8.3	7.4	8.6
New Ireland	17.5	13.2	11.4	11.0	-
Prudential Life	11.7	8.0	9.2	8.7	9.6
Prudential Life 1986	11.4	-	-	-	-
Royal Life Cash	-	-	-	-	-
Standard Life	6.3	6.1	6.2	6.9	7.4
GILT
Abbey Life 1	21.0	9.5	13.8	11.3	11.7
Abbey Life 2	-	-	-	-	-
IBI/CLI Gilt	23.2	12.1	15.2	12.5	12.5
IBI Lifetime Gilt	-	-	-	-	-
Friends’ Provident	24.4	11.4	16.5	-	-
Hibernian Life Gilt	27.0	11.2	16.5	14.3	15.9
Hibernian Life Capital	26.7	10.6	16.0	-	-
Irish Life-High Income	23.4	12.1	16.4	13.6	14.5
New Ireland	17.8	17.4	18.6	15.5	15.4
Prudential Life	20.6	11.1	15.4	13.3	12.3
Prudential Life 1	-	-	-	-	-
Royal Life	-	-	-	-	-
Standard Life	26.2	12.6	17.0	13.9	14.1
PROPERTY
Abbey Life 1	6.8	2.2	-2.3	-1.5	-3.7
Abbey Life 2	-	-	-	-	-
CLI/IBI Prop.	16.0	9.8	8.5	7.8	8.8
IBI Lifetime Prop.	-	-	-	-	-
Hibernian Life	4.6	8.9	8.0	7.8	9.3
Irish Life	4.1	2.3	-	-1.3	-0.1
Friends’ Provident	7.2	5.4	3.0	-	-
New Ireland 1	4.2	1.8	1.6	1.1	1.4
Norwich Union 1	3.6	1.1	0.8	1.9	2.2
Prudential Life	3.5	1.5	0.5	-0.2	1.3
Prudential Life 86	14.9	-	-	-	-
Prudential Life 2	-	-	-	-	-
Standard Life	24.7	8.8	8.8	6.4	8.8
MISCELLANEOUS
Friends’ Provident Index	11.5	4.7	3.9	-	-
Hibernian Life Index	13.3	6.9	4.3	2.2	-
Hibernian Life Int.	-5.7	6.3	6.0	5.5	8.3

Appendix 2 - (iii)

PERCENTAGE RETURN ON AVERAGE POLICYHOLDERS FUNDS - ORDINARY BUSINESS

Percentage return on dividends rents and appreciation on index linked assets

1979	13.0	15.6	13.0	11.0
1980	17.8	15.3	17.3	11.6
1981	12.5	12.9	12.4	16.0
1982	16.2	19.4	16.3	17.5
1983	15.9	16.5	15.9	18.4
1984	7.8	8.1	8.5	19.4
1985	15.5	18.3	16.6	10.5
1986	15.6	16.6	15.6	14.1

Source: Blue Book

Appendix 2 - (iv)

RETURN ON SHAREHOLDERS FUNDS

	Profit after tax IR£ (000)	Average Shareholders Funds IR£ (000)	Percentage return on capital after tax
1981	300	1,400	21.4
1982	339	1,555	21.8
1983	381	1,717	22.2
1984	511	1,925	26.5
1985	557	2,181	25.5
1986	567	2,422	23.4

Source: Irish Life

Appendix 2 - (v)

COMPARISON OF COMMISSIONS AS A PERCENTAGE OF PREMIUM INCOME

Ordinary Branch - Business within Ireland

	Irish Life	ICI Life	Total Irish Incorporated Companies	Non-Irish Incorporated Companies
1979	7.1	5.8	8.2	9.1
1980	7.2	5.2	8.5	10.0
1981	6.2	5.5	7.1	8.8
1982	6.3	5.9	7.5	7.7
1983	6.6	4.2	5.9	8.4
1984	6.1	5.4	5.5	4.5
1985	6.9	16.4	8.6	3.2
1986	4.5	7.3	5.7	6.6

Industrial Branch - Business within Ireland

	Irish Life	Irish Incorporated Companies Total	Non-Irish Incorporated Companies
1979	6.0	5.8	23.2
1980	5.7	5.5	23.8
1981	5.2	5.4	22.1
1982	6.6	6.1	20.9
1983	6.3	7.3	18.4
1984	5.4	5.9	17.8
1985	6.5	6.5	16.5
1986	4.2	2.9	16.7

Ordinary Branch - Business outside Ireland

	Irish Life
1979	14.1
1980	28.2
1981	57.5
1982	48.8
1983	41.7
1984	35.9
1985	31.0
1986	20.7

Source: Blue Book

Appendix 2 - (vi)

COMPARISON OF MANAGEMENT EXPENSES AS A PERCENTAGE OF PREMIUM INCOME

Ordinary Branch - Business within Ireland

	Irish Life	ICI Life	Total Irish/ Non-Irish Controlled	Non-Irish Companies
1979	5.9	7.2	6.6	7.1
1980	7.0	8.3	7.8	8.7
1981	6.3	6.5	7.0	7.8
1982	7.9	6.0	8.7	8.5
1983	9.0	4.0	7.5	9.7
1984	6.9	5.7	6.5	4.6
1985	9.5	26.6	12.3	5.0
1986	11.1	11.5	11.5	17.7

Industrial Branch - Business within Ireland

	Irish Life	Irish Companies Total	Total Non-Irish
1979	46.9	47.6	23.6
1980	48.4	49.3	25.5
1981	50.5	50.9	24.4
1982	51.9	53.3	23.6
1983	53.0	55.5	24.8
1984	48.6	50.7	24.0
1985	47.2	50.8	26.0
1986	50.4	55.3	17.8

Ordinary Branch - Business outside Ireland

	Irish Life
1979	14.0
1980	16.4
1981	17.2
1982	15.4
1983	14.6
1984	18.9
1985	13.1
1986	16.2

Source: Blue Book

Appendix 2 - (vii)

1.DIVIDENDS ON IRISH LIFE SHARES HELD ON BEHALF OF MINISTER FOR FINANCE

2.ACTUARIAL SURPLUSES

	1.	2.
Receipts into Exchequer during year ending	IR£	IR£000
31.3.56	2,820	-
31.3.57	2,820	99
31.3.58	2,820	-
31.3.59	8,461	405
31.3.60	10,041	-
31.3.61	14,581	497
31.3.62	14,892	-
31.3.63	18,351	472
31.3.64	21,586	-
31.3.65	20,044	800
31.3.66	20,044	450
31.3.67	21,134	525
31.3.68	20,533	580
31.3.69	26,399	650
31.3.70	23,466	675
31.3.71	26,399	825
31.3.72	28,159	900
31.3.73	30,506	1,300
31.3.74	23,466	-
31.12.74 (9 months)	26,984	-
31.12.75	35,198	1,100
31.12.76	41,064	2,473
31.12.77	48,060	3,022
31.12.78	58,845	4,100
31.12.79	79,873	4,900
31.12.80	98,376	6,840
31.12.81	126,354	9,830
31.12.82	148,917	12,850
31.12.83	175,993	16,100
31.12.84	234,000	19,000
31.12.85	275,400	20,300
31.12.86	316,730	22,700
	2,002,316

Note: Receipts in each year comprise:

(a)final dividend in respect of the company’s previous accounting year,

and

(b)the interim dividend for the current year.

Source:	1.	Department of Finance.
	2.	Irish Life. Prior to 1965, data available only on a bi-annual basis.

Appendix 2 - (viii)

IRISH LIFE ASSURANCE PLC -

TOTAL ASSETS AT 31 DECEMBER, 1986

Fixed Interest	IR£ 979 million
Equities	IR£ 886 million
Other Assets (net of loans in respect of overseas investments IR£195 million)	IR£ 13 million
Properties	IR£ 259 million
Deposits & Short term Investments	IR£ 324 million
Total	IR£ 2,461 million

Source: Irish Life Assurance plc. Annual Report 1986.

GLOSSARY OF TERMS

Unit Linked Policies:

Unit linked policies are those where the return to the policyholder is based on the return achieved by the company on specific funds. For example, if the policyholder specifies that his policy is to be placed in a property fund, the value of his policy will increase in line with the growth in property held by that particular fund.

Non-Profit Policies:

A non-profit policy is one where the company guarantees a fixed return on the policyholders investment. For example, a policyholder may agree to pay a series of premiums on the understanding that a fixed sum becomes payable to him at an agreed future date.

With-Profit Policies:

A with-profit policy is the same as a non-profit policy except that in return for the payment of an additional premium, the policyholder is entitled to a share of the overall profit/surplus earned by the company on its entire portfolio of investments excluding unit linked funds.

Investment and Revaluation Reserve:

Until 1986, all assets, with the exception of assets held in unit linked funds, were shown at cost less investment reserve in the accounts of the company. All capital profits arising from these assets which were stated at cost were transferred to an account known as the “investment reserve”. A portion of this reserve was then allocated to the policyholders at the year-end at the discretion of the actuary, if it was required to top-up policyholders funds. The balance remaining on this account was not disclosed in the financial statements. This treatment is permitted under the Sixth Schedule to the Companies Act, 1963. From 1986 the Company changed its accounting policy in this regard to disclose in its Balance Sheet investments held in respect of non-linked business at market value.

Unrealised appreciation and depreciation of non-linked investments are carried to the investment and revaluation reserve. Profits and losses on realisation of investments, taxes thereon, and exchange adjustments which relate to non-linked business are also carried to the investment and revaluation reserve.

Actuarial Surplus:

At the end of every year up to 1985, the company valued its unit linked assets at market value and its other assets at cost and compared these with the total amounts due to its policyholders on foot of various policies which it had in issue at that time. The difference between these two amounts represented the actuarial surplus.

While the company changed its accounting policy in 1986 to disclose its non-linked investments at market value as indicated above under the heading of “Investment and Revaluation Reserve”, unrealised appreciation and depreciation of non-linked investments are carried to the investment and revaluation reserve and do not form part of the fund which is used to determine the actuarial surplus.

Industrial Assurance:

Life policies, the premiums for which are collected on a door to door basis at intervals of less than 2 months.

Ordinary Life Policies:

All policies carried by the company with the exception of Industrial Assurance policies.

* Insurance Corporation of Ireland (Life) Ltd. was acquired by Prudential Life during year ended 31 December, 1985.