Interim results - Worldwide long-term savings new business – Three months to 31 March 2006
Overview
Aviva achieved excellent growth in worldwide total long-term savings new business sales, up 26% to £7,917 million (2005: £6,312 million), representing the highest level of quarterly sales since the group was formed. This includes growth in life and pensions sales of 20% to £6,788 million (2005: £5,659 million) and growth in investment sales of 72% to £1,129 million (2005: £653 million). New business contribution was £235 million (2005: £197 million), with growth of 20% reflecting the higher sales. New business contribution after required capital grew even faster than sales, up by 29% to £178 million (2005: £138 million), reflecting the success of our value and volume strategy.
Strong total sales performances were achieved by Aviva International and Aviva UK with growth of 21% to £4,710 million (2005: £3,920 million) and 34% to £3,207 million (2005: £2,392 million), respectively. Sales through the bancassurance channel achieved 41% growth to £2,161 million, benefiting from additional access to branches in the UniCredit Group in Italy and the new partnership with Allied Irish Banks (AIB) in Ireland. An impressive sales growth of 92% was also achieved through the bancassurance partnership with the Royal Bank of Scotland Group (RBSG).
We are delighted with the first quarter sales performance of Norwich Union in the UK where we have posted a fourth consecutive quarter of growth. The benefit of the pricing and commission strategy adopted in the second half of 2005, together with the broad product offering, resulted in strong sales growth across most of the product range. The new business margin of 2.8% was ahead of the margin achieved in the second half of 2005 of 2.7%.
Sales in Continental Europe grew by 17% to £4,004 million (2005: £3,446 million) and included growth in Ireland of 41% and Italy of 43% driven by the increased access to bank networks discussed above. Favourable market conditions in France, Spain and Poland supported strong growth of 12%, 9% and 115% respectively. In the Netherlands, market developments and exceptional annuity sales in the first quarter of 2005 resulted in lower comparative sales. The overall new business margin for Continental Europe was higher at 3.9% (2005: 3.7%), reflecting the more favourable mix of business in France, Spain and the Netherlands.
Within Rest of the World, sales in the United States grew by 56% and in Asia by 65%, including a strong contribution from Aviva’s rapidly developing operations in India and China.
This performance represents a very strong start to the year and growth is expected to continue for the remainder of 2006, albeit at a lower level as stronger comparatives come through.
