Aviva beats forecasts

INSURER Aviva topped forecasts with a 5 per cent dip in life and pensions sales in the first quarter, as a recovery in its domestic market was offset by the United States, where a focus on profitability halved sales.
By The Newsroom
Published 11th May 2010, 10:20 BST

Aviva, Britain's second-largest insurer after Prudential, said life and pensions sales in the quarter totalled 9.13bn compared to 9.57bn a year ago. Compared to the fourth quarter, however, sales were up 15 per cent.

Analysts had expected sales of 8.49bn, with estimates ranging from 7.9bn to 9.19bn, according to 13 forecasts collected by the company.

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Aviva said its combined operating ratio - a measure of profitability for general insurance - was hit by bad weather in the first quarter, but it confirmed its 98 percent target for the full year.

Rival RSA Insurance said last week that bad weather in Europe would cost it 80m.

UK life sales came in flat on the year-ago quarter but up 14 per cent on the fourth quarter, as Aviva benefitted along with rival insurers from an increase in the minimum retirement age that has boosted volumes across the sector.

In the United States, sales were down 48 per cent year-on-year, hit by Aviva's focus on profit over sales which forced it to slow the pace of annuity sales.

Aviva said separately it had shareholder exposure to the sovereign debt of Greece, Spain and Portugal totalling 900m at the end of March, with Greece alone accounting for 150m.

Related topics:AvivaUnited StatesBritainEuropeSpainPortugalGreece