Weakening margins are not so Friendly.
The slower property market lay behind the pressure on profit margins, as Friends said it had experienced a change in its product mix as a result of a reduced proportion of protection business.
It offered encouragement from overall sales figures as life and pensions new business for the first six months of 2005 increased by 33 per cent to pounds 282 million. In the UK, the figure of pounds 202 million represented an increase of 15 per cent, while international sales more than doubled to pounds 80 million following the acquisition of Luxembourg-based insurer Lombard International earlier this year.
Chief executive Keith Satchell said that, while the company had 'excellent sales momentum' in the UK, the change in the product mix was likely to remain a feature in the second half.
In UK life and pensions, the profit contribution from new business in the first half of 2005 increased by pounds 2 million to pounds 32 million, although the margin reduced to 15.8 per cent from 17 per cent as a result of the product mix.
Friends said the overall UK protection market contracted by 22 per cent over the first quarter of 2005 and that sales of new protection products, including income protection, decreased by 2.6 per cent to pounds 34.2 million in the first half.
Despite the drop, Friends said it expected to increase market share in the sector.