The £47m annualised premium equivalent (APE), down from £70m in 2013, reflected poor sales of regular premium business across all its regions with North Asia showing the biggest fall of 53% from £19m to £9m.
FPI said in its Q2 results statement that volumes were hit in North Asia by regulatory changes resulting in the whole unit-linked insurance market “falling by approximately half in the first quarter of 2014 compared to the first quarter of 2013”.
In South Asia, the APE also came down significantly from £11m to £7m (36%), while in the Middle East there was a 20% decline from £20m to £15m, and in the international division’s UK and rest of the world the drop was by a quarter.
In July, Middle East and Africa general manager Matt Waterfield resigned from his position and is due to leave FPI at the end of September to relocate back to the UK. This was followed by Friends Life remodelling the senior management structure of the Friends Provident International business.
FPI’s overall APE for the second quarter was down 31%, from £35m to £24m.
This trading performance, alongside “adverse foreign exchange movement and a potential change in the biting capital constraint” meant that FPI would not be paying an interim dividend in 2014, and the full year dividend remains under review.
FPI's results come after Standard Life’s Asia and emerging market business returned to profit in the first half of this year.
Parent company Friend Life Group said it “remains confident that the international division will make an increasing contribution towards generating shareholder cash and value for the future”.
“FPI has completed the process of reviewing its markets and re-risking its business”, it said, adding that “recent regulatory changes in the Middle East will strengthen FPI’s competitiveness in that region”.
Future trading would be helped by the launch of the Flexible Future Benefit Trust in the UK, a decreasing assurance product in the Middle East, and a new international platform for the product range which was expected to be ready to accept new business by the end of Q3 this year.
In July, Friends Life agreed to sell its Luxembourg-based Lombard International Assurance business to global investment group Blackstone for an initial consideration of £317m (€399m), and an analyst report suggested FPI could be sold next year.
