Interim results - Worldwide long-term savings new business – Three months to 31 March 2006
Rest of the World
Asian businesses:
In line with its longer-term strategic ambitions for the region, Aviva continues to achieve a strong rate of growth in new business sales. Total sales from operations in Asia were up 65% to £175 million (2005: £97 million).
Singapore: Total sales increased by 27% to £93 million (2005: £67 million), driven primarily by significantly higher investment sales through Navigator, the investment fund administration business. Life and pension sales were £47 million (2005: £55 million) reflecting a slow quarter, although bancassurance sales through DBS showed a strong increase in March. Aviva remains the market leader in the developing broker market as well as the employee benefits and healthcare segment.
Sales through Navigator increased significantly to £46 million (2005: £12 million), reflecting strong distribution relationships with key brokers, a comprehensive range of funds offered and a buoyant equity market.
Hong Kong: Sales increased significantly to £40 million (2005: £18 million), due to strong IFA sales together with good performance from the partnership with DBS in Hong Kong. Aviva’s growing IFA channel now accounts for 45% of total sales.
India: Total sales from our joint venture with the Dabur Group increased strongly in the first quarter of 2006 to £105 million (2005: £35 million), ranking Aviva seventh amongst private insurers. Our 26% share of new business sales was £27 million (2005: £9 million). Aviva is the leader in the bancassurance market in India with 22 distribution agreements. The direct sales force now numbers more than 9,300 agents, with an additional 3,500 in training.
Sri Lanka: On 1 February 2006, Aviva acquired a 51% stake in Eagle Insurance Company Limited (Eagle), the third-largest insurer in Sri Lanka. At the same time, Eagle entered into a bancassurance agreement with National Development Bank Limited, Sri Lanka’s biggest development bank and Eagle’s other major shareholder. Total life sales since acquisition were £4 million.
China: Sales through the joint venture life business, Aviva COFCO, continue to grow rapidly. Total sales were £22 million (2005: £6 million), of which Aviva’s 50% share was £11 million (2005: £3 million). Aviva recently received approval to open a branch in Jinan, the capital city of Shandong province and sales offices in Xiamen (Fujian province) and Shenzhen (Guangdong province). This brings the total number of major cities where Aviva is licensed to five, with sales offices in a further seven cities.
New business contribution increased by 28% to £8 million (2005: £5 million) with a new business margin of 6.2% (2005: 5.9%), reflecting the growing importance of operations in Asia.
Rapid growth is expected to continue from the developing markets in India and China with significant growth continuing in the more mature markets in Hong Kong and Singapore.
