Aviva promises stability as rival Standard Life reshapes

Aviva promises stability as rival Standard Life reshapes

Aviva has said it will offer its clients "stability" as Standard Life Aberdeen sells off its life business to focus on asset management.

Yesterday (8 March) the FTSE 100 insurance company revealed profits were up 2 per cent in the past year to £3bn.

Jason Windsor, chief financial officer of Aviva UK Life, said: "There will be a period of disruption while Standard Life Aberdeen undertake that merger and we will be saying that we offer stability to our clients and will continue to offer that to them as best that we can."

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Phoenix will buy Standard Life Aberdeen's book of insurance contracts, including annuities and workplace pensions, as part of a £3bn deal announced last month.

The deal will see £166bn of insurance assets moved to Phoenix, while Standard Life Aberdeen will retain the core of its retail channel - including its platform and financial advice business.

Lindsey Rix, managing director of savings and retirement at Aviva, said: "If the question is around mergers and acquisitions, we have got no significant mergers and acquisitions anticipated in the UK.

"That is unlikely to be a priority for us."

She said Aviva benefited from having a "wider" position in the market.

Operating profit on Aviva's UK life business was up 15 per cent, from £1.5bn in 2016 to £1.76bn last year, driven by a 13 per cent improvement in new business profits and continued growth of the long-term savings business.

UK long-term savings operating profit increased 30 per cent to £185m as assets under management increased to £118bn due to positive net flows and well performing markets.

Assets on Aviva's platform increased by 56 per cent to £20bn but it has been plagued with problems since an upgrade in January, including an inability to pay adviser charges and produce client reports.

When asked about the chances of this affecting Aviva in the long-term, Ms Rix said: "We have made a strategic investment and made the migration across to our new platform and clearly we are having some initial issues, which we are working through as quickly as we possibly can.

"We have invested in this for the future."