AVIVA will tomorrow reveal an 11 per cent drop in first quarter life and pensions sales, according to analysts, against the flow of gradual improvement reported by other insurers.
The City’s consensus forecast is £8.5bn for the first three months of 2010, down from £9.6bn at the start of 2009. The fall contrasts with new business growth from rivals such as Standard Life and Legal & General, who have seen their numbers boosted by a rush for ISAs as the savings limit for over-50s was hiked.
The Square Mile’s estimate suggests a quarter-on-quarter improvement for Aviva, however. The world’s fifth-largest insurance group delivered £7.9bn life and pension sales in the three months to December.
One factor behind the year-on-year slump is the sale of Aviva’s Australian business in October last year, which has stripped out some revenues.
In February, the company said it had balanced its new business well between volume, capital efficiency and profitability, meaning it had deliberately foregone sales in some areas. At the time, chief executive Andrew Moss said: “We expect the market to remain tough in the short term as the impact of the recession continues to influence demand for investment and savings products, but the strength of our brand, broad product range and distribution reach have left us well-placed to continue driving growth.”
Aviva turned a profit of £2.9bn in 2009 under MCEV reporting. Its shares closed at 303.4p on Friday.
ASIA CHIEF EXECUTIVE
PRUDENTIAL may have claimed the headlines in recent weeks, but Aviva has its eyes on Asia too.
The largest insurer in the UK moved to enter Indonesia’s life market this year and is set to re-enter the life business in Singapore.
“Our entry into Singapore marks the first step in our plan to penetrate the rapidly expanding general insurance market in Asia,” regional chief executive Simon Machell said in March. “The rising affluence of Asian consumers has led to an increasing need to insure their growing assets.”
Rival insurer Legal & General has tacitly dismissed Prudential’s mega-bid for AIA in Asia as a high-risk way to enter the market, preferring the joint venture route. Aviva has also taken this path, partnering with Indonesian player PT Asuransi Wahana Tata to enter that country.
In India it is tied to Dabur, operating under the brand Aviva India, while in China it has joined forces with consumer products company Cofco.
Last year, Aviva sold its Australian unit to National Australia Bank for A$925m (£554.7m) to focus on key Asian markets.