Aviva growth in the fast lane as general insurance sales soar

The group, which has around 4,800 Yorkshire employees, said general insurance was its “real highlight” of the first three months of the year, maintaining momentum to report its fifth successive quarterly increase.

General insurance sales increased 20 per cent to £1.09bn for the quarter as car insurance premium rates and the firm’s customer numbers both continue to climb.

“We’re showing real momentum in general insurance which is very strong and pleasing for us,” said Aviva UK commercial director David Barral.

“People are still having to spend money on their motor and household insurance.”

The group now has two million motorists on its books after adding 580,000 UK customers since the start of 2010, including 180,000 as a result of the roll-out of direct pricing to brokers.

Aviva has also been buoyed by the success of an advertising campaign featuring actor Paul Whitehouse, known for his work with comedian Harry Enfield, in which he plays a variety of characters promoting a range of insurance products.

“They’ve been hugely popular and helped to drive understanding of Aviva,” said Mr Barral.

Aviva said the adverts have helped improve levels of visibility, recognition and consideration. It said recognition of the Aviva brand peaked at 58 per cent during the quarter from 54 per cent a year ago.

The group added it expects to see recent industry trends on insurance premiums continue. These increased by 24 per cent for personal motor cover, with a 10 per cent rise for commercial motor premiums and a six per cent increase for homeowner products.

Aviva added conditions in commercial property and liability remain “soft”, resulting in single digit premium increases.

In the group’s York-based UK life and pension business, Aviva’s sales were down two per cent to £2.5bn as a result of a change in product mix to focus on more profitable business.

On an underlying basis, UK life and pension sales increased seven per cent to £2.73bn. Within this, total pension sales rose 19 per cent to £1.12bn, with individual pensions soaring 39 per cent, its strongest sales result since 2006.

“There’s been a return, particularly in the life market, to spending by employers on pensions,” said Mr Barral.

Aviva employs 2,750 people in York, 1,700 in Sheffield and 330 in Leeds. “It’s a great message for our Yorkshire-based employees, as it is for our employees around the UK,” added Mr Barral.

“We’re investing heavily in developing products and services while at the same time concentrating on becoming more efficient and cost-effective.”

Chief executive Andrew Moss said: “We have made a good start to the year. Our general insurance performance is a real highlight – sales are up strongly and profitability is good.”

Across the group, Aviva reported a 14 per cent drop in first-quarter life insurance sales, as it withdrew from less lucrative sectors of the market to boost profitability. The group had first-quarter life sales of £8.8bn after it walked away from less profitable business in the United States and Italy.

Aviva, which operates in about 30 countries, has been trying to boost profits and cash generation by concentrating on the 12 markets where it makes the most money. Mr Moss said he was confident about the group’s prospects in mainland Europe despite the tough economic outlook.

“We absolutely believe European markets are going to be an attractive engine for growth for us over the next few years,” he said. “These are markets where, despite the near-term economic challenges, people have money, they save money and need more of it.”

Shares in the group closed up 2.3p at 436.3p.