France
Aviva France achieved strong growth in 2004, with total new business sales of £2,516 million (2003: £1,996 million), a 29% increase on the previous year. This excellent performance includes total new business sales from the new bancassurance joint venture partnership with Crédit du Nord of £109 million (£17 million on an APE basis). Excluding Crédit du Nord sales, growth during the year of 23% outperforms an estimated increase in the total individual life and savings market of 14% during the first 11 months of 2004.
AFER is the largest savings association in France and continues to be an important source of new business growth for Aviva France, with more than 616,000 members at the end of 2004. Total sales through AFER increased by 33% to £1,594 million (2003: £1,225 million) making 2004 the highest year of production since the creation of the association. Over 40% of this growth is due to policies purchased by the 38,000 new members joining the association in 2004, a significant increase compared to 2003. Sales of single premium AFER euro funds were 23% higher at £1,389 million (2003: £1,157 million), compared with estimated market growth of 10% during the first 11 months of 2004. This very high level of growth in AFER sales, particularly in the fourth quarter, is very encouraging.
The proportion of the French market invested into unit-linked funds continues to benefit from steadily improving equity markets and total Aviva France sales of unit-linked funds nearly doubled to £698 million (2003: £358 million). This equates to growth of 91% excluding Crédit du Nord sales and compares to an estimated 34% increase in the individual unit-linked life and savings market during the first 11 months of 2004. Included within unit-linked funds is strong growth in SFER, the unit-linked funds sold through AFER, with increased sales of £205 million (2003: £68 million). Unit-linked products sold through AFER now represent 13% of total AFER sales and AFER customers now have access to a wider range of funds, following the launch of two new funds during the year.
Total regular premiums for euro and unit-linked funds increased by 71% to £45 million (2003: £27 million), or 46% growth excluding Crédit du Nord. Sales of Plan d'Epargne Retraite (PERP) continue to be moderate as higher net worth individuals, who are the target market for Aviva France, have yet to embrace annuity type products. As consumer awareness gradually increases, the pensions market in France is expected to grow in importance in the longer-term.
From 1 October 2004, sales through the new bancassurance joint venture with Crédit du Nord came on stream and total sales amounted to £109 million. This is an encouraging start for the partnership, which gives Aviva France exclusive distribution for life business through Crédit du Nord's network of over 600 branches.
