Friends Provident has unveiled an ambitious new sales target after producing a stellar 40 per cent jump in new life and pensions to £1.6 billion in the third quarter.

The life insurer's share price jumped 5.7 per cent higher to a three-year high of 205p following the news.

Ben Gunn, chief executive, said the group's new target for the UK was to "triple our 2005 value of new business to between £180 and £200 million by 2008".

This follows the surprisingly high third-quarter performance which outshone results from rivals Legal & General, Prudential and Aviva earlier ths month.

BACKGROUND

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Friends Provident, like its peers, has been assisted by pension reforms rolled out by the government earlier this year which spurred greater activity in savings products.

In the UK, the insurer's new pensions business jumped 48 per cent higher in the quarter to £728 million.

Overall, its UK and life and pensions operations were up 33 per cent to just over £1 billion, also bolstered by strong life protection insurance sales.

The only disappointing result in the UK was a 7 per cent fall in sales in new investment products. The insurer attributed this to the fact it had maintained investment margins in the face of strong competition, including the launch of new products and special offers.

Overseas, the star performer was its Lombard life insurance division, bought last year, which was up 87 per cent to £409 million.

"We have announced very successful nine month trading figures today, with our international businesses continuing to grow very strongly as predicted," Mr Gunn said

"The UK market also offers some attractive opportunities to Friends Provident over the next few years as we continue our strategy to build on our presence in key profitable market segments," he said. "We have transformed our group pensions and protection offerings into market leading propositions from minor positions."

He said Friends Provident will spend up to £80 million in 2007 and 2008 on a push to increase its share of the company protection and corporate pensions.

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