Investment by insurance companies, pension funds and trusts

Transcription

1 Statistical Bulletin: Investment by insurance companies, pension funds & trusts Page 1 Investment by insurance companies, pension funds and trusts 4 th Quarter Date: 26 March 2010 Coverage: UK Theme: The Economy Total net investment by these institutions was provisionally Total net investment¹ billion estimated to have been 24.8 billion in the fourth quarter of, billion higher than the revised third quarter net investment figure of 20.3 billion. Compared to the fourth quarter of net investment has increased by 49.4 billion from a net disinvestment of 24.6 billion Short-term assets increased by 13.7 billion from a net 10 disinvestment of 7.5 billion to a net investment of 6.2 billion in the 0 fourth quarter, while British government sterling securities and UK -10 company securities decreased in the fourth quarter by 5.6 billion and 4.2 billion respectively. These decreases were partly offset by increases in net investment of 0.4 billion and 0.2 billion in other assets and overseas securities respectively Total net investment by asset type not seasonally adjusted: billion Short-term British government UK company Overseas Other assets sterling securities securities securities assets 1 Total p Q Q Q1r r Q3r p Figures before the first quarter of are not wholly comparable. See background note 9 New survey questionnaires

2 Statistical Bulletin: Investment by insurance companies, pension funds & trusts Page 2 Total net investment by institutional group In the fourth quarter of long-term insurance funds were provisionally estimated to have had net disinvestment of 6.2 billion, a decrease of 7.4 billion on the net investment figure of 1.2 billion shown in the third quarter of. General insurance funds showed net investment of 4.3 billion, a 3.7 billion increase on the previous quarter and net investment by self-administered pension funds increased by 5.5 billion to show a net investment of 8.6 billion. Investment trusts reported net disinvestment of 0.1 billion in the fourth quarter of compared with a net investment of 0.1 billion in the third quarter of, while net investment by unit trusts and property unit trusts decreased by 2.3 billion to show a net investment of 13.5 billion. Total net investment by institutional group Insurance funds Long Self-admin. term 1 General 1 Pension funds Investment Trusts not seasonally adjusted: billion Unit & property Consolidation unit adjustment 2 Total p Q Q Q1r r Q3r p Figures before the first quarter of are not wholly comparable. See background note 9 New survey questionnaires 2 An adjustment to remove inter-sectoral flows between the different types of institutions covered by this First Release. The adjustment includes (i) investment in authorised unit trust units and investment trust shares by insurance companies, pension funds and trusts and (ii) investment by pension funds in insurance managed funds.

3 Statistical Bulletin: Investment by insurance companies, pension funds & trusts Page 3 Total net investment by institutional group: Detail Total net investment by long-term insurance funds¹ billion Total net investment by selfadministered pension funds billion Total net investment by general insurance funds¹ billion Total net investment by trusts 10 billion Figures before the first quarter of are not wholly comparable. See background note 9 New survey questionnaires

4 Statistical Bulletin: Investment by insurance companies, pension funds & trusts Page 4 Total net investment of institutional groups by asset type Total net investment by institutions in the fourth quarter of was provisionally estimated to have been 24.8 billion, an increase of 4.5 billion on the revised third quarter figure. This reflects increases in self-administered pension funds of 5.5 billion and general insurance funds of 3.7 billion. Other sectors showed a decrease in net investment. The most notable decrease in net investment of 7.4 billion was by long-term insurance funds. Short-term assets There was total net investment in short-term assets of 6.2 billion in the fourth quarter compared with a net disinvestment of 7.5 billion in the third quarter. The increase of 13.7 billion reflected increased net investment by self-administered pension funds and long-term insurance funds of 6.3 billion and 4.8 billion respectively. These were partly offset by decreased net investment of 1.1 billion by unit trusts and property unit trusts. British government sterling securities There was net investment in British government sterling securities of 1.9 billion in the fourth quarter compared with a net investment of 7.5 billion in the third quarter. Most notably, this reflected decreased net investment of 6.9 billion by long-term insurance funds. These decreases were partly offset by an increase in net investment of 1.4 billion by general insurance funds. UK company securities UK company securities showed a net disinvestment of 3.7 billion in the fourth quarter compared with a net investment of 0.5 billion in the third quarter. This reflected decreased net investment of 4.7 billion and 3.0 billion by self-administered pension funds and long-term insurance funds respectively. Overseas securities Overseas securities increased net investment by 0.2 billion in the fourth quarter. This reflected an increase in net investment of 3.4 billion by self-administered pension funds. This increase was partly offset by decreased net investment by long-term insurance funds of 2.7 billion. Other assets The residual category, other assets, showed net investment of 8.5 billion in the quarter, an increase of 0.4 billion on the third quarter figure.

5 Statistical Bulletin: Investment by insurance companies, pension funds & trusts Page 5 Revisions Figures for the first three quarters of have been revised, partly as a result of late questionnaires being received and partly as a result of disaggregate data revisions. Net investment in the first two quarters of has been revised down from 11.7 billion to 10.0 billion, in the first quarter and from 31.6 billion to 30.3 billion in the second quarter. Net investment in the third quarter has been revised up from 19.4 billion to 20.3 billion.

6 Statistical Bulletin: Investment by insurance companies, pension funds & trusts Page 6 Background Notes Basic quality information Link to Summary Quality Report 1. A Summary Quality Report for Investment by insurance companies, pension funds and trusts can be found at: This report describes, in detail, the intended uses of the statistics presented in this publication, their general quality and the methods used to produce them. Relevance to users 2. This bulletin brings together information on the investments made by institutions whose primary business is the investment of funds in the financial markets. It draws on data compiled from a series of quarterly and annual sample surveys. 3. The consolidation adjustment is an adjustment to remove inter-sectoral flows between the different types of institution covered by this Statistical Bulletin. It has been calculated by identifying and calculating totals for net investment in mutual funds such as authorised unit trust units, investment trust shares and insurance managed funds by insurance companies, pension funds and trusts. In terms of asset types, the take-up of authorised unit trust units by institutions and the investment in insurance managed funds by pension funds have been removed from the other assets category where they were previously included; the take-up of investment trust shares by institutions has been removed from the UK ordinary shares category. These adjustments have been included for all periods. 4. More detailed information on net investment by insurance companies, pension funds, investment, unit and property unit trusts appears in Business Monitor MQ5. This will be available from the National Statistics website on the 7 April Investment statistics are also published in Chapter 5 of the Financial Statistics publication. 5. Complete runs of series in this Statistical Bulletin are available to download free of charge at Alternatively, for low-cost tailored data call Online Services on or tailored@statistics.gov.uk.

7 Statistical Bulletin: Investment by insurance companies, pension funds & trusts Page 7 Accuracy Revisions to previous periods 6. The quarterly figures for are provisional and subject to revision in the light of late responses to the surveys. They will remain provisional until the results of the annual surveys are processed and published in late Revisions to data provide one indication of the reliability of key indicators. The table below shows summary information on the size and direction of the revisions which have been made to the data covering a five year period. A statistical test has been applied to the average revision to find out if it is statistically significantly different from zero. An asterisk (*) shows that the test is significant. The table covers estimates of combined total net investment first published from June 2002 (for 2002 Q1) to March 2007 (2006 ). Revisions between first publication and estimates three years later billion Value in latest period Average over the last 5 years (mean revision) Average over the last 5 years without regard to sign (average absolute revision) Total net investment * 4.3* A spreadsheet giving a revisions triangle (real time database) of estimates from 1996 to date and the calculations behind the averages in the table is available on the National Statistics website at: The larger revisions occur when the results of the annual surveys to insurance companies and pension funds are introduced. New ways of investigating the consistency of quarterly data were set up during 2005 to try to identify and correct errors in quarterly survey contributor data which subsequently lead to those revisions. More information about the revisions material in this Statistical Bulletin can be found on the National Statistics website:

8 Statistical Bulletin: Investment by insurance companies, pension funds & trusts Page 8 7. Figures marked indicate that the data have been revised since the last edition; the period marked is the earliest in the table to have been revised. Figures in the tables denominated in billion may not add up because of rounding. Response rates 8. The figures in the Statistical Bulletin are based on a system of quarterly and annual surveys collecting data on transactions in financial assets and balance sheet information. In broad terms, the results of the quarterly surveys are used to produce the net investment information; the results of the annual surveys are used to produce figures on holdings and amounts outstanding. Overall response rate by survey (%) for 4 th Quarter Transactions Insurance companies: Long-term funds 85 Insurance companies: General funds 71 Self-administered pension funds 75 Unit trusts 78 Investment trusts 83 Property unit trusts 87 Overall Response Rate by Survey (%) For Annual Balance Sheet Insurance Companies: Long-term Funds 96 Insurance Companies: General Funds 91 Self-administered Pension Funds 88 Assets and Liabilities Unit Trusts 83 Investment Trusts 97 Property Unit Trusts 80

9 Statistical Bulletin: Investment by insurance companies, pension funds & trusts Page 9 New survey questionnaires 9. As stated in the fourth quarter Statistical Bulletin, improvements have been made to the questionnaires for these surveys in order to better reflect new international accounting standards and European requirements. The ONS also took the opportunity to improve aspects of the survey methodology. The improved quarterly questionnaires were introduced in respect of first quarter of and these methodological changes can lead to an element of data discontinuity. The impact of the survey review and questionnaire changes on data is shown below: Value of discontinuity billion Q1 Q3 Annual RCAA: Long-term insurance funds RFUC: General insurance funds RLKE: Total identified assets ONS will consider providing continuous series removing the discontinuities when the annual benchmarked data for are published in the Statistical Bulletin for the third quarter of 2010 in December If the annual discontinuity revision had been taken on, the effect would be to change the current total net investment figure of 19.2 billion, to a net investment of 25.6 billion. A more detailed note on new survey questionnaires will appear in the Business Monitor MQ5. This will be available from the National Statistics website on the 7 April Release policy 10. Details of the policy governing the release of new data are available from the press office. Also available is a list of the names of those given pre-publication access to the contents of this release. 11. National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference. Crown copyright 2010.

10 ATOTAL NET INVESTMENT BY ASSET TYPE - COMBINED 1 SUMMARY BALANCE SHEET AND NET INVESTMENT Identified assets million Holdings at end of year: market values UK company secur ities Overseas securities UK land, Br itish Company secur ities buildings, Total government property, identified Short-ter m ster ling Ordinar y Ordinar y Government UK loans and Other and new assets 10 assets 2 secur ities shares Other 3 shares Other 4 secur ities mor tgages assets 5 10 constr uction RLJP RLJQ RLJR RLJT RLJU RLJX RLJY RLJZ RLKA RLKC RLKD Net investment: cash values RLKE RLKF RLKG RLKH RLKI RLKJ RLKK RLKL RLKM RLKO RLKP Q Q Q Q Identified liabilities Residual Amounts outstanding: market values Net inflow to Total life assurance identified Total monetary Unit trust Other UK Overseas Capital and pension Other Consolidation liabilities borrowing 6 units liabilities liabilities issues 7 funds residual 8 adjustment 9 RLLR RLKQ RLKR RLKT RLKU RLKS RLKV RLKW -AMRL Net transactions: cash values RLLS RLKX RLKY RLLA RLLB RLKZ RLLQ RLLD -AMRU Q Q Q Q Sign convention : Liabilities increase + / decrease - 6 Including pension fund long-term borrowing for amounts outstanding. 1 The sum of self-administered pension funds, long-ter m and general insurance funds, investment, unit and property unit trusts. Data from the Pension 8 Including reserves and provisions of investment, unit and property unit trusts 7 Relates to investment trusts only. Funds surve ys are of lower quality than equivalent data from other institutional groups because of the difficulties in constructing a suitable sampling 9 An adjustment to remove inter-sectoral flows between the different types of in- and general insurance companies. frame of pension funds for the surve ys. stitution covered by this First Release. The adjustment includes (i) investment 2 Including net balances with stockbrokers. in authorised unit trusts and investment trust shares by insurance companies, 3 Including UK corporate bonds, debentures and preference shares. pension funds and trusts and (ii) investment by pension funds in insurance 4 Including overseas debentures and preference shares. managed funds. 5 Including British government and government guaranteed securities denominated in foreign currency, UK local authority securities etc, UK public ground note 9 "New sur vey questionnaires" 10 Figures before the first quarter of are not wholly comparable. See back- cor poration securities, overseas loans and mortgages, proper ty unit trust Source: National Statistics units, other investments and changes in direct investment and balances of overseas branches.

11 BTOTAL NET INVESTMENT BY INSTITUTIONAL GROUP SUMMARY BALANCE SHEET AND NET INVESTMENT Institutions million Total identified Long-ter m insurance General insurance Self-administered Unit and property Consolidation assets 3 4 funds 4 funds 4 pension funds 3 Investment trusts unit tr usts 1 adjustment 2 Holdings at end of year: market values RLJP RLDW RLDY RLDP CBGW CBHR -AMRL Net investment: cash values RLKE RCAA RFUC RZNI CBGB CBHY -AMRU Q Q Q Q Including open ended investment companies (OEICs). 2 An adjustment to remove inter-sectoral flows between the different types of institution covered by this First Release. The adjustment includes (i) investment in authorised unit trusts and investment trust shares by insurance companies, pension funds and trusts and (ii) investment by pension funds in insurance managed funds. 3 Data from the Pension Funds surve ys are of lower quality than equivalent data from other institutional groups because of the difficulties in constructing a suitable sampling frame of pension funds for the surve ys. 4 Figures before the first quarter of are not wholly comparable. See background note 9 "New sur vey questionnaires" Source: National Statistics

12 CTOTAL NET INVESTMENT OF INSTITUTIONAL GROUPS BY ASSET TYPE Identified assets Institutions million Unit trusts and Total identified Long-ter m insurance General insurance Self-administered proper ty unit Consolidation assets 3 4 funds 4 funds 4 pension funds 3 Investment trusts trusts 1 adjustment 2 SHORT-TERM ASSETS RLKF RYFT RYLQ RYKP CBGC RLHL Q Q BRITISH GOVERNMENT STERLING SECURITIES RLKG AHPJ AHOJ AHQX RLLU RLHM Q Q UK COMPANY SECURITIES AMQS HLTM HLTS GATO AMQX AMRA -AMRK Q Q OVERSEAS SECURITIES AMQU HLTN HLTT GAMV AMQY AMRH Q Q ALL OTHER ASSETS 4 AMQW HLTO HLTU GALN AMQZ AMRI -AMTO Q Q TOTAL IDENTIFIED ASSETS 4 RLKE RCAA RFUC RZNI CBGB CBHY -AMRU Q Q Including open ended investment companies (OEICs) 2 An adjustment to remove inter-sectoral flows between the different types of institution covered by this First Release. The adjustment includes (i) investment in authorised unit trusts and investment trust shares by insurance companies, pension funds and trusts and (ii) investment by pension funds in insurance managed funds. 3 Data from the Pension Funds surve ys are of lower quality than equivalent data from other institutional groups because of the difficulties in constructing a suitable sampling frame of pension funds for the surve ys. 4 Figures before the first quarter of are not wholly comparable. See background note 9 "New sur vey questionnaires" Source: National Statistics

13 RTOTAL NET INVESTMENT BY ASSET TYPE REVISIONS TO SERIES PREVIOUSLY PUBLISHED million Br itish government Shor t-term assets sterling securities UK company secur ities Overseas securities Other assets Total Q1 Q3 Q Q Source: National Statistics

14 Statistical Bulletin: Investment by insurance companies, pension funds & trusts Page 14 Next publication: 29 June 2010 Issued by: Office for National Statistics, Government Buildings, Cardiff Road, Newport NP10 8XG Media contact: Tel Media Relations Office Emergency on-call Statistical contact: Tel Stephen Curtis Website: