Interim results - Worldwide long-term savings new business – Three months to 31 March 2006
Continental Europe
Italy:
Aviva Italy recorded total sales growth of 43% to £845 million (2005: £601 million, which included one-off direct business of £53 million). This compares favourably with the Italian market, where total sales3 in the first two months of 2006 fell by 11% due to lower bancassurance activity. UniCredit Group undertook a marketing initiative in the first quarter of 2006, while all of Aviva’s other bancassurance partners are expected to run marketing campaigns later in the year.
UniCredit Group achieved strong growth with sales up 147% to £528 million (2005: £217 million), although this exceptional rate of growth is not expected to continue for the rest of the year. Sales were boosted following access to additional branches in the UniCredit Group network, together with successful marketing campaigns. Regular premium business sales were up by 168% to £124 million (2005: £47 million).
Banche Popolari Unite achieved sales growth of 27% to £196 million (2005: £156 million) driven by strong sales of regular premium profit-sharing business. Further new products are planned for later in the year to widen the product range.
Sales through the Banca Popolare Italiana Group network were £100 million (2005: £140 million). The 2005 figures include sales of limited offer structured investment bonds, which received less marketing focus during the first quarter of this year.
Sales through Banca delle Marche were lower at £14 million (2005: £33 million), reflecting a change in the timing of marketing campaigns with new product launches planned for later in the year.
The long-term growth potential remains strong in the Italian market and Aviva’s increased bancassurance distribution with UniCredit Group further strengthens Aviva’s market position. As in previous years, the timing of marketing campaigns and new product launches varies throughout the year, resulting in some sales volatility each quarter.
New business contribution increased to £21 million (2005: £16 million), reflecting the strong growth in sales, with a margin of 2.5% (2005: 2.7%).
3. Market sales growth is calculated using the volume measure, single plus annualised regular premiums.
