Aviva life business returns to growth as insurer recovers

The UK life division, which is based in York and led by chief executive David Barral, saw 18 per cent growth in the third quarter, with new business of £120m.

However, its nine-month total stood at £303m, lagging nine per cent behind 2013’s £330m.

Group chief executive Mark Wilson, who was brought in following a shareholder revolt in 2012, said Aviva is in “an entirely different position” two years on.

He said: “This is a self-help story, but there is still very much more to do.”

The third quarter uptick was driven by Aviva’s business protection and equity release products and growth in bulk annuity sales, Mr Wilson said.

Bulk annuities are sold to companies looking to offload pension liabilities, whereas individual annuities provide savers a regular income based on circumstances.

Sales of individual annuities plummeted across the industry earlier this year, following the pension freedom announcements in Chancellor George Osborne’s Budget.

From April 2015, savers will no longer be required to lock into an annuity, in favour of flexible access to funds.

As a result, annuities accounted for 20 per cent of new business in the first three quarters of 2014, compared to 32 per cent for the previous year.

Overall UK annuity business was down 33 per cent in the first nine months.

This was an improvement on the 41 per cent decline seen in the first half of the year, due to increased bulk annuity volumes, Mr Wilson said.

At group level, new business in Europe rose 40 per cent, while strong demand in Asia boosted its results by 47 per cent.

Mr Wilson said recent market volatility is a reminder of the “global economic uncertainty that still exists”.

He added: “We believe our diversified business model and the steps we have taken to improve risk management positions us well for such adversity.”

Earlier this year, Aviva revealed it had reversed a £2.9bn loss in 2012 to record a £2.2bn profit in 2013.

The results follow Mr Wilson’s restructuring of the company, which included selling non-core businesses, cutting costs and improving profitability.