Zurich Life Ireland has reported a fall in new business for the six months to the end of June.

The company said the market remains challenging as margins are still under pressure.

Zurich said its new business annual premium equivalent (APE) was down 22% to €65.8m from €83.8m the same time last year.

When investment only figures are included, its new business APE fell by 14% to €77.4m from €89.9m.

However, the company said its cross border new business APE increased by 37% to €48m from €34.9m. Zurich Life Assurance provides significant levels of life and investment new business into EU markets, including the UK, Italy and Germany.

Combined Ireland and cross border new business APE was up 1% to €125.4m, the company added.

Group risk business - assurance and income protection schemes provided by employers for company workers - saw new business rising by 41% to €2.8m from €2m the same time last year.

Anthony Brennan, chief executive of Zurich Life Assurance in Ireland, said that recent reports have shown Irish consumer sentiment at a two year high and rises in personal savings, disposal income and a continuing fall in credit card debt.

''I am more hopeful with consumer confidence building, combined with a demonstrated ability to save, that very soon we will see some disposal income returning to the savings and investment market. With the expected fall in bank deposit rates this will create opportunities for non-deposit alternatives such as unit-linked funds,'' he added.

Group second quarter profits beat expectations

Zurich Insurance Group today posted a second-quarter profit ahead of expectations. The rise was helped by an absence of big claims and rising business from Latin America, the Middle East and Asia

Europe's second-biggest insurer by market capitalisation recorded a net profit of $1.075 billion, compared with forecasts of $987m.

Profit for the quarter was 19% lower compared to a year ago, with the 2011 net figure boosted by the one-off proceeds of a Chinese stake sale.

"We are successfully executing our growth strategy, as the increased contribution to business volume from the high-growth regions of Latin America, the Middle East and Asia Pacific shows, and we see promising delivery from selected mature markets," chief executive Martin Senn said.