Strong US and Asian growth boosts Aviva sales

25-04-2008

Strong US and Asian growth boosts Aviva sales
Insurer Aviva has reported five per cent sales growth in life and pensions during the first quarter, benefiting from a strong US performance.

A tough economic environment pressured sales in the UK, but US sales were up 24 per cent, the Norwich Union owner said.

UK life and pension sales fell three per cent to £2.77 billion and investment sales fell 34 per cent to £436 million, as consumers adopted "a more short-term outlook in preference to saving for the future".

Aviva blamed the fall on market trends, particularly in sales of UK commercial property funds. The company said it is confident that property fund sales will begin to return in the second half of the year.

Chief executive Andrew Moss said: "These results highlight the value of our expansion in the US, which set another quarterly sales record, and in Asia Pacific, where we've recently opened new businesses in Taiwan and Malaysia.

"We expect that UK market growth will be constrained this year, but believe that our new products and breadth of distribution will continue to position us well."

In the US, Aviva claimed a record quarter for its North American arm. Sales were up 24 per cent to £1.04 billion, based on strong growth in the funding agreement business, as the guaranteed capital return products sold well in the volatile market conditions.

Growth was also strong in Asia, where the company is expanding rapidly. Aviva posted sales growth of 24 per cent to £871 million in the region.

Aviva said it remains on course to achieve the medium-term target of growing long-term savings new business sales and profits by an average of at least ten per cent a year to 2010.

In general insurance, the company expects pressure on volumes in competitive markets to continue, but is confident of achieving its 98 per cent combined operating ratio (COR) 'meet or beat' target in 2008.

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