Aviva plc: Worldwide long-term savings new business – 12 months to 31 December 2006
Aviva International
Netherlands (including Germany and Belgium):
Delta Lloyd's total sales, including investment product sales, were £744 million (2006: £856 million). The Dutch market has continued to be challenging, with a decline in mortgage-related business and a slowdown in unit-linked sales. In this environment, Delta Lloyd grew life and pension sales by 4% year-on-year, excluding the one-off effect of the £125 million Delta Lloyd pension scheme premium in the first quarter of last year.
Life and savings sales were £202 million (2006: £299 million). In the Netherlands, mortgage related business declined due to lower activity in the re-mortgaging market, and savings sales have been affected by negative press-coverage of unit-linked policy charging within the industry. In Germany, investment bond volumes were lower following the increase in short-term interest rates experienced in 2006. In Belgium, where market conditions have been more stable, savings product sales increased marginally.
Pension and annuity sales were £401 million (2006: £423 million). Annuity sales were higher at £160 million (2006: £88 million), reflecting more competitive pricing of Delta Lloyd's immediate annuity products. Delta Lloyd's pension sales tend to fluctuate from quarter to quarter due to the timing and size of group contracts, with the year-on-year trend affected by the £125 million premium received from the Delta Lloyd pension scheme in the first quarter of 2006 and an absence of large contracts since the start of 2007.
Investment sales were 8% higher at £141 million (2006: £134 million), reflecting the success of Delta Lloyd's new Select Opportunity fund, which focuses on undervalued European equities, attracting sales of £34 million.
New business contribution was £21 million (2006: £19 million) with a new business margin of 3.5% (2006: 2.6%). The 2007 margin development benefits from the impact of the 70 basis point increase in the bond yield within assumptions at the start of 2007.
The Dutch market is expected to remain highly competitive in 2007. In this context, Delta Lloyd continues its strategy of broadening distribution in order to strengthen its position in the market.
