Aviva: no planned changes to headcount in Yorkshire

INSURANCE GIANT Aviva said there are no planned changes to its headcount in Yorkshire as a result of controversial reforms to the annuity market.

The group saw mixed performances from its businesses in the first quarter of the year, with strong Asian and European markets offset by a big drop in the UK after a shake-up of its products and the pensions system.

The company’s key measure of growth in life insurance - value of new business - showed a 22 per cent decline in Britain, while new business in Asia grew 96 per cent and Italy, Spain and Ireland collectively doubled.

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Aviva has 2,000 staff at its life headquarters in York and 1,500 in Sheffield.

In its quarterly trading statement Aviva said the drop in UK volumes was largely driven by a rejig of its annuities business - focusing on selling fewer, higher margin products - which it started a year ago.

Its UK business was subsequently affected by the Government’s decision in March to free retirees from being obliged to buy annuities, allowing them to invest pensions savings elsewhere.

Chief executive Mark Wilson called first quarter performance “reassuringly calm and stable”, in light of high weather-related insurance claims at the start of the year and the shake-up of the pensions system that has hit annuity sales across the industry.

Mr Wilson said the general insurance arm had taken a hit amounting to around £40m related to a “particularly harsh” winter in Canada. Storms and floods in Britain during January and February also cost the firm around £60m in the first quarter, he added.

The combined ratio for the group, showing claims as a proportion of premiums which is used by insurance companies as a measure of profitability, declined to 97.7 per cent in the quarter from 95.5 per cent a year earlier, Aviva said.

Mr Wilson has driven a far-reaching shake-up of Aviva since joining from Asian rival AIA in late 2012. He has cut costs, sold off non-core assets and reshaped top management.

The life division bore the brunt of a £100m savings drive, which led to the loss of 400 jobs in Yorkshire.