Aviva Investors has already benefitted from Aviva’s Friends Life acquisition by acquiring £20bn of funds that were directly managed by the insurer, with more set to come.
Aviva’s first quarter results, published today (7 May 2015) revealed that preparations to receive Friends Life funds managed by external parties are “underway”.
In the first quarter, Aviva reported that UK life, the largest contributor to value new business sales at the provider, grew 15 per cent in the first quarter to £103m.
Protection new business was broadly flat and annuities new business was down 60 per cent at the start of this year compared with the beginning of 2014, following last year’s Budget changes.
Platform assets under administration increased 19 per cent on a year ago to £6.3bn, compared with £5.3bn at the start of 2014 with £800m of positive net fund flows.
The Aims [Aviva Investors Multi-Strategy] flagship range of multi-asset funds now has £1.2bn of funds under management and bosses said performance was strong, with the Aims Target Return fund up 9 per cent in the first nine months after launch.
In terms of pension freedom, which began on 6 April 2015, Aviva stated front line staff were “well prepared” for the increased volume of enquiries.
Friends Life’s value of new business declined to £20m following Q1 2014’s £32m, driven principally by a decline in retirement income new business following last year’s Budget changes regarding annuities.
Protection new business grew 6 per cent and Friends Life had positive net fund flows in corporate benefits, the results said.
Friends Life’s corporate benefits funds under management increased 7 per cent over the quarter to £23.6bn, following £200m of net inflows and £1.4bn of positive net market movements.
Mark Wilson, group chief executive of Aviva, said the provider’s turnaround is on track and ahead of schedule.
He said it had been a busy quarter with the completion of the acquisition of Friends Life.
Mr Wilson said: “In the face of unpredictable global markets, we continue to improve the Group’s resilience.
“Detailed plans to integrate Friends Life are well underway and whilst this is a challenging and complex project, we are confident of timely progress. We expect 2015 to be a year of continued delivery of our turnaround plan.”
emma.hughes@ft.com
