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SHOULD AVIVA BE CONCERNED BY FALLING SALES OR CONTINUE TO FOCUS ON INCREASING PROFIT MARGINS?

<strong>DUNCAN HALL </strong>FINNCAP<br />&ldquo;Pursuing profit margins over growth in volume is the right strategy at this moment when it&rsquo;s all about good management and tight cost control. In the current environment there probably isn&rsquo;t that much volume out there, so why try to chase it?&rdquo;<br /><br /><strong>BARRIE CORNES </strong>PANMURE GORDON<br />&ldquo;Although new business sales were shy of expectations, the key issue is that Aviva is preserving capital and their margins have moved forward nicely in the UK. We were pleasantly surprised by the embedded value per share at 520p.&rdquo;<br /><br /><strong>CHARLIE MENEGATOS </strong>ACCENDO MARKETS<br />&ldquo;The statement will further strengthen the insurers fundamentals and put a floor under the Aviva share price. Group margins are in line with full year 2008 at 2.1 per cent with a significant balance sheet improvement and, significantly, the outlook for 2009 total profitability remains good.&rdquo;