British insurance giant Aviva on Wednesday reported an 11-percent drop in worldwide sales during the first nine months of the year but claimed the group’s profit outlook was “good.”
Aviva, Britain’s second largest insurer after Prudential, said new life and pension sales fell to 24 billion pounds (40 billion dollars, 27 billion euros) compared with 27 billion pounds in the first nine months of 2008.
“The outlook for the group’s total profitability in 2009 is good despite a reduction in sales driven by continuing customer caution and active management of sales volumes to optimise profitability,” Aviva chief executive Andrew Moss said in a statement.
Highlights:
Managing for profit
- Worldwide total sales and life and pensions sales both reduced by 11% due to lower consumer demand and strategic actions
- Group margin in line with full year 2008 at 2.1%
- Outlook for 2009 total profitability remains good
Strong uplift in capital and balance sheet
- Enhanced IGD solvency surplus of £3.7 billion
- 25% increase in MCEV NAV per share at 520 pence from half year 2009
Increasing pace of transformation
- Successful partial IPO of Delta Lloyd, completion of sale of Australian life business, UK reattribution and US listing
- Europe strategy to deliver synergies and improve distribution and customer focus
- New executive team responsibilities announced and new CFO appointed
Andrew Moss, Aviva’s group chief executive, commented:
“In recent months Aviva has completed a number of strategic initiatives which, together with improving financial markets, significantly increased our capital and balance sheet strength. The outlook for the group’s total profitability in 2009 is good despite a reduction in sales driven by continuing customer caution and active management of sales volumes to optimise profitability.
“In the past three months we’ve completed the sale of our Australian life business, listed on the New York Stock Exchange, announced future management changes and begun to send a total of £0.5 billion to 805,000 UK customers as a result of our inherited estate reattribution.
“Yesterday’s successful IPO of part of our holding in Delta Lloyd was another significant milestone for Aviva, giving us further opportunity to reallocate capital to other parts of the group. The changes we have made increase our financial flexibility and position Aviva well for the future.”
