Spain
Aviva Spain new business sales were £461 million (2004: £466 million), including one-off sales of £25 million (2004: nil). In the bancassurance distribution channels, the product focus this quarter has been on higher margin protection and pension products, and reduced sales of lower margin traditional savings products, where the market has been particularly competitive. This beneficial product mix has increased the new business margin to 8.5% (2004: 6.8%), although sales through our bancassurance partners in Spain overall were lower at £389 million (2004: £440 million).
Aviva continues to be a leading bancassurer in the Spanish life market and was number three in the market overall in 2004, based on gross written premiums. Growth potential is strong across our bancassurance partnerships, although quarterly sales volumes are variable due to the timing of marketing campaigns and product launches. Aviva Spain continues to review and develop the product range, and have revised product terms. The company intends to launch further savings products later in the year, in order to continue the sales momentum. This should result in a more balanced product mix between protection and savings products.
At Aviva Vida y Pensiones, which distributes through a direct sales force and intermediaries, new business sales increased to £72 million (2004: £27 million) due to strong sales of individual pensions and unit-linked life business, and included one-off sales of £25 million (2004: nil) in respect of large group savings and risk schemes.
