Worldwide long-term savings new business 9 months to 30 September 2007
Overview
Aviva achieved continued strong growth in the nine months to 30 September 2007, with total long-term savings new business sales up 26% to £28,278 million (2006: £22,718 million). The overall increase reflects growth in life and pension sales of 21% to £22,935 million (2006: £19,128 million), and strong investment sales, up 49% to £5,343 million (2006: £3,590 million).
Aviva UK delivered a strong performance with total sales increasing by 5% to £10,949 million (2006: £10,464 million). The company delivered life and pension sales of £8,750 million (2006: £8,791 million), and at the same time improved its margin to 3.1% (2006: 2.9%). Life and pension sales would have grown 3%1 if consistent operating assumptions had been used in the comparative period. Aviva UK achieved strong performances in the annuity, bond and collective investments markets. The company's share of sales through its joint venture with The Royal Bank of Scotland Group (RBSG) grew by 31% to £1,153 million (2006: £879 million), with sales for the nine months to date equivalent to those achieved in the whole of 2006.
Aviva Europe's long-term savings sales grew by 17% to £11,556 million (2006: £9,968 million). This reflects strong growth within the region, from Southern Europe, Ireland and Central and Eastern Europe. In addition, Aviva France has had a very strong third quarter in a market which has declined in 20072. Life and pension sales for the region were 14% higher at £10,442 million (2006: £9,261 million), and investment sales grew by 59% to £1,114 million (2006: £707 million). New business margin remained strong at 3.8% (2006: 4.0%) and new business contribution before the effect of required capital increased by 9% to £400 million (2006: £370 million).
Total new business sales in Aviva North America were £2,705 million (2006: £408 million) and pro forma sales have increased by 41%3 (pro forma 2006: £2,103 million). Aviva USA has delivered another record quarter of sales, including a particularly strong performance in the funding agreement business. The positive momentum is anticipated to continue for the remainder of the year although not necessarily at the exceptional growth rates experienced to date. The recent AM Best rating upgrade to A+ will act as an important catalyst for further growth in the United States.
Aviva Asia Pacific continues to achieve a strong rate of growth in new business sales with total sales 66% higher at £3,068 million (2006: £1,878 million), driven primarily by strong Navigator (wrap administration platform) sales across the region. Total new business sales for the region in the 9 months to September 2007 have already surpassed the results for the 2006 full year. New business contribution before the effect of required capital from life and pension sales increased 68% to £52 million (2006: £33 million) producing a new business margin of 5.0% (2006: 4.9%). Growth potential for the region remains strong and Aviva's diversified model places the business in a strong position for continued growth.
-
1. Comparative sales figures are stated before the effect of year end 2006 assumptions changes. Restating sales comparatives for the effect of 2006 persistency assumption changes, in order to give a like-for-like comparison using the same persistency basis, results in the following growth progression:
- Total sales, including investments, would have increased by 8% to £10,949 million (2006: £10,180 million)
- Life & pension sales would have increased by 3% to £8,750 million (2006: £8,507 million)
Total pension sales would have fallen by 6% to £3,520 million (2006: £3,756 million).
- 2. In GWP terms the French market has declined by 4% in the first nine months of 2007.
- 3. Pro forma increases are based upon the combined sales for the former Aviva business based in Boston and the former AmerUs Group for the 2006 year to date third quarter and are stated on a constant exchange rate basis. Comparative pro forma amounts are not restated for exchange rate movements.
