Worldwide long-term savings new business - Nine months to 30 September 2006
26 October, 2006
- Strong worldwide performance: Total sales1 up 22%2 to £22,718 million
- Record UK performance: Total sales up 39% to £10,464 million, with a strong market outlook
- Robust international new business growth: Total sales up 11% to £12,254 million
- Excellent investment product sales, up 54% to £3,590 million
- Strong growth in bancassurance sales, up 25% to £5,756 million, representing a quarter of total sales
- New business profit growth of 16%, with group new business margin remaining strong at 3.5%
- AmerUs acquisition on track to complete by the end of 2006
Richard Harvey, group chief executive, commented:
"We've achieved strong growth in new business while sustaining the profitability of these sales. This result proves the competitive advantage we’re building through our worldwide business model and demonstrates Aviva's strengths of scale, balance and diversified product offerings.
"In the UK, our business is growing fast, our margin is stable and we are the market leader. We've sold more long-term savings new business in the nine months to September than in the whole of 2005. Meanwhile, Aviva International is increasing net new business profits at almost twice the rate of sales, which continue to grow strongly.
"Aviva is well-positioned to capture growth in the world's largest long-term savings markets where we expect demand for products to continue to rise as private saving increases."
| Financial highlights | 9 months to 30 September 2006 | 9 months to 30 September 2005 | Local currency growth2 |
|---|---|---|---|
| Aviva UK | |||
| Life and pensions new business sales | £8,791m | £6,686m | 31% |
| Investment sales | £1,673m | £855m | 96% |
| Total long-term savings new business sales | £10,464m | £7,541m | 39% |
| New business contribution before required capital | £254m | £201m | 26% |
| New business margin before required capital | 2.9% | 3.0% | |
| Aviva International | |||
| Life and pensions new business sales | £10,337m | £9,574m | 8% |
| Investment sales | £1,917m | £1,486m | 30% |
| Total long-term savings new business sales | £12,254m | £11,060m | 11% |
| New business contribution before required capital | £412m | £374m | 10% |
| New business margin before required capital | 4.0% | 3.9% | |
| Aviva Group | |||
| Life and pensions new business sales | £19,128m | £16,260m | 18% |
| Investment sales | £3,590m | £2,341m | 54% |
| Total long-term savings new business sales | £22,718m | £18,601m | 22% |
| New business contribution before required capital | £666m | £575m | 16% |
| New business margin before required capital | 3.5% | 3.5% | |
- All references to sales in this announcement refer to the present value of new business premiums (PVNBP) unless otherwise stated. PVNBP is the present value of new regular premiums plus 100% of single premiums, calculated using assumptions consistent with those used to determine new business contribution.
- All growth rates quoted are at constant rates of exchange.
UK Life analyst and investor briefing
In a presentation to investors and analysts today, the Norwich Union Life management team will provide an update on its strategy for the UK life business.
Norwich Union is confident about the future prospects for the business given:
- Exceptionally strong Q3 new business results, with total sales up 39% and margins stable at 2.9%
- A leading market position with an increased market share of 12.1%
- A positive outlook for the UK savings market and strong business model focused on profitable and sustainable growth
- Significant and ongoing progress on service standards
The company is confident there will be continued growth in the UK life and pensions market with customers saving more for their future financial wellbeing as the savings ratio continues to rise. Norwich Union will set out its plans to attract a growing proportion of these savings based on its strong business model that combines a trusted brand, a broad product range and a multi-distribution capability.
Norwich Union will provide an update on its plans to realise the long-term potential of the UK life business. The company will focus on developing the business to exploit new market opportunities, continuing to improve service, rationalising its cost base, simplifying legacy systems and managing retention.
This builds on the announcement made on 14 September 2006 where Norwich Union outlined its plans to deliver £250m of cost savings per annum across its UK life and general insurance businesses in 2008.
Patrick Snowball, executive chairman of Norwich Union, commented:
"I am very excited about the tremendous opportunity to build on the excellent franchise of our UK life business. Through a combination of strengthening the management team and leveraging the existing expertise, we aim to achieve operational excellence across our business. This, in turn, will enable us to grow market share in the medium term as well as increase the profitability of our business."
Mark Hodges, chief executive, Norwich Union Life, commented:
"We lead the UK market in terms of our distribution platform, our product range and our new business sales. We also have an in-force life and pensions book that is the largest and most valuable in the country. Through implementing a series of targeted measures we will improve our market leading position in all these areas, with the aim of improving returns both to our customers and our shareholders."
Enquiries:
| Analysts/Investors: | |
| Philip Scott, group executive director, Aviva | +44 (0)20 7662 2264 |
| Patrick Snowball, group executive director, Aviva | +44 (0)20 7662 7574 |
| Charles Barrows, investor relations director, Aviva | +44 (0)20 7662 8115 |
| Jessie Burrows, head of investor relations, Aviva | +44 (0)20 7662 2111 |
| Media: | |
| Hayley Stimpson, director of external affairs | +44 (0)20 7662 7544 |
| Sue Winston, head of group media relations | +44 (0)20 7662 8221 |
| Vanessa Booth, group media relations manager | +44 (0)20 7662 2482 |
| Rob Bailhache, Financial Dynamics | +44 (0)20 7269 7200 |
There will be a conference call today for wire services at 7:45am (BST) on +44 (0)20 7162 0125. This conference call will be hosted by Philip Scott, group executive director, Aviva International and attended by Andrew Moss, group finance director and Patrick Snowball, group executive director, Aviva UK.
There will be a conference call today for analysts and investors at 9:00am (BST) on +44 (0)20 7162 0126. This conference call will be hosted by Philip Scott, group executive director, Aviva International and attended by Andrew Moss, group finance director and Patrick Snowball, group executive director, Aviva UK.
Replay will be available for two weeks until 10 November 2006. The dial in number for replays is +44 (0)20 7031 4064 and the pass code is 718722.
A presentation for investors and analysts will be held today at 11:00am (BST) at the offices of Aviva plc, St Helen’s, 1 Undershaft, London EC3P 3DQ. There will be a conference call for analysts and investors on +44 (0)20 7365 1833. A replay will be available for two weeks until 10 November 2006. The dial in number for replays is +44 (0)20 7806 1970. The pass code is 7872804# for the presentation and questions and answers, and 4414726# for questions and answers only. The presentation slides will be available on the this website from 11:00am (BST). The presentation is also being filmed for webcast and can be viewed live on this website.
Photographs are available in the Aviva media centre.
