ISH insurer Aviva has become the latest to be hit hard by the government’s changes to the UK pensions market, as new business fell 22 per cent in the first quarter of the year to £89m from £114m the year before.
This fall was offset by strong figures from elsewhere in Europe, and Asia, where the value of new business rose 45 per cent and 96 per cent respectively. Nonetheless, shares fell more than three per cent yesterday.
Overall, the value of new business, the number Aviva uses to measure progress, was up 13 per cent to £228m from £208m in the first quarter of 2013.
Changes to the pensions market in the UK, announced by chancellor George Osborne in his Budget in March this year, had a marked impact on the group with new business down 43 per cent to £40m in the UK annuity market.
Chief executive Mark Wilson called the results “reassuringly calm and stable, in marked contrast to the weather and regulatory developments”.
Wilson added that re-pricing of some products had also contributed to a decline in new business in the UK arm of the group.
“Aviva still faces challenges both in the external environment and in the business as we progress our turnaround,” Wilson said yesterday.
“The regulatory environment is constantly changing and soft conditions persist in certain general insurance lines. As a business we remain focused on cash flow, expense efficiency and the clinical allocation of capital to areas where we can maximise returns. There is still much to do.”