Aviva’s UK life unit saw new business values up 18 per cent to £120m over the three months to 30 September, as protection new business sales surged and offset continuing downturn in annuity sales following the Budget at-retirement reforms.
For the first nine months of the year new business value was down 9 per cent to £297m, with overall UK annuity business falling 33 per cent for the year to the end of September. This is an improvement on the 41 per cent decline recorded in the first half, due in part to increasing ‘bulk’ annuity deals.
The group’s largest product contributor was protection insurance, making up 36 per cent of new business in the first nine months, while annuities only accounted for 20 per cent. The firm said it had “actively shifted business mix to mitigate the impact of low interest rates and regulatory change”.
Mark Wilson, group chief executive, stated that Aviva’s turnaround is delivering, with the steps taken to focus and strengthen the group mean it is in a different position to two years ago.
“Notwithstanding this progress, there is still more to do before we can be satisfied we are fully delivering on our investment thesis of cash flow plus growth.”
He added that Aviva is starting to demonstrate consistency in its results and the focus remains on addressing outstanding issues and completing the turnaround.
Progress with its cost cutting programme continued, with infrastructure and restructuring costs lowered by 62 per cent compared to than the same period in 2013, although most of this decrease was down to reduced costs relating to the implementation of European ‘solvency II’ rules.
peter.walker@ft.com
