France
Aviva France sales increased 33% to £2,593 million (2004: £1,937 million), with £560 million of sales through the bancassurance joint venture with Crédit du Nord. The strategy continues to focus on higher margin unit-linked products over pure volume, resulting in the new business contribution increasing 51% to £98 million (2004: £64 million) and the contribution after required capital increasing 81% to £66 million (2004: £36 million). Unit-linked sales grew 84% to £1,034 million (2004: £558 million) representing 40% of sales compared with 23%1 for the French individual savings market for the eight months to August 2005. New business margin increased to 3.8% (full year 2004: 3.4%).
AFER, the largest retirement savings association in France with more than 630,000 members at the end of September 2005, remains an important source of new business, accounting for 47% of sales (2004: 60%). Unit-linked sales grew strongly by 73% to £276 million (2004: £159 million) and represented 22% of total sales (2004: 14%). Euro fund sales fell by 6% giving overall steady growth at 5% to £1,230 million (2004: £1,168 million).
Unit-linked business represented 61% of total sales for non-AFER business sold outside the bancassurance partnership and increased 21% to £486 million (2004: £399 million). In line with the strategy of focusing on higher margin unit-linked sales, Euro fund sales were down by 18% with overall sales growing by 4% to £803 million (2004: £769 million).
Market growth in France to August 2005 was 13% as insurance products remain attractive, however, Aviva France expects there to be a slow down in the rate of market growth towards the end of the year and into 2006. Good equity performance has supported the strategy of distributing unit-linked products. With a diversified distribution capability, market-leading investment performance and award winning fund management expertise, Aviva France is well positioned for continued strong growth in unit-linked business.
- Based on the volume measure of total sales (single plus annualised regular premiums).
