Spain
Aviva continues to be the number one bancassurance group in the Spanish life market and number two in the market overall, achieving an increase in market share from 10.0% in 2003 to 11.1% in the first half of 2004, based on gross written premiums.
New business sales have had a strong third quarter, growing by 19% to £1,254 million (2003: £1,071 million) following further growth in our developing bancassurance partnerships and including one-off sales of £242 million (2003: £149 million) or £30 million (2003: £30 million) on an APE basis. Excluding these one-off sales, underlying growth of 11% was achieved, compared with a market increase of 3% in the first half year, based on gross written premiums.
In our bancassurance distribution channels the focus in 2004 has been on higher margin protection products over traditional savings products. Sales through Bancaja reflect this change in product mix and were consequently lower at £469 million (2003: £606 million). We achieved underlying growth from our partnerships with Unicaja, Caja de Granada and Caixa Galicia, where there was further large bulk pension transfer business in the third quarter generating total one-off premium sales of £242 million for the nine month period.
Growth potential is strong across our bancassurance partnerships as we look to increase customer penetration and we continue to develop the product range in all our joint ventures. However, quarterly sales are variable due to the timing of marketing campaigns and product launches, with the third quarter traditionally being lower as a result of the slower summer period.
New business contribution amounted to £93 million (2003: £92 million), including £3 million from the bulk pension transfers in Caixa Galicia. New business margins for Spain were 51.1% (full year 2003: 54.4%) reflecting the underlying increasing proportion of higher margin protection sales, offset by the impact of the lower margin one-off sales.
