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Aviva Reports 5% Rise in Sales Print E-mail

TEP – 28 April 2009

Insurance giant Aviva sought to ease concerns over trading after it reported a 5% rise in sales and described demand as "resilient".

The firm, which will ditch its UK trading name of Norwich Union in June, posted worldwide sales of £10.3 billion in the three months to March 31, with life and pension sales climbing 11% to £9.57 billion.

Aviva said it had significantly enhanced its capital position over the past three months, with a regulatory surplus of £2.5 billion at the end of last month, up from £2 billion in December.

Shares in the company opened more than 7% higher following the update.

The rally represented a reversal of fortunes for Aviva after shares slumped 25% in March on Aviva's decision to maintain its dividend, despite ongoing market worries about the industry's solvency position.

Chief executive Andrew Moss said the company continued to manage its capital position effectively.

He added: "It's encouraging to see that people are continuing to save with companies they trust, like Aviva.

"Sales are resilient and we've taken action to improve margins in key markets."

In the UK, life and pensions new business sales were 12% lower at £12.5 billion, which Aviva said reflected its move away from lower margin products and its writing of new business above target rates of return.

The company's portfolio of businesses across Europe saw life and pensions sales increase by 11% to £4.73 billion, supported by the strength of euro.

Norwich Union continues to renegotiate the reattribution of its with-profits fund's inherited estate.  It says discussions with the policyholder advocate are drawing to a close, and the final deal is likely to be considerably less than its original offer. The inherited estate has been valued at £1.4bn at the end of March.

 

 

 
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