Aviva in Australia today announced a 31% lift in its 2005 pre-tax profit, up to A$160 million from A$122 million.
Aviva in Australia[1] today announced a 31% lift in its 2005 pre-tax profit, up to A$160 million from A$122 million.
Gross new business sales for 2005 (both retail and wholesale), were up 22% at A$6.8 billion (2004: A$5.5bn). This result included an outstanding increase in sales of the life insurance business by 120% to A$127.3 million resulting from Aviva's ProtectionFirst initiative and an increase in Navigator sales by 26% to in excess of A$2bn achieved through ongoing improvements in product offerings and excellence in customer service.
Corporate superannuation sales also saw moderate growth in 2005, despite market uncertainty resulting from the introduction of Choice of Fund Legislation on 1 July 2005. Recent Federal Government changes (specifically the abolition of the 12.5% superannuation surcharge and contributions splitting) will, however, be beneficial to this products growth over the medium term.
During the year Aviva also launched a simplified version of the Navigator product, "Navigator Access," which targets lower account balances, to broaden the distribution range of the product set.
Aviva has also agreed strategic investments and alliances with a number of distribution partners, to enhance future sales volumes across both Life and Navigator products. These include strategic stakes in Professional Investment Holdings, Financial Technology Securities and a product alliance with HBOS to utilise Aviva's Navigator platform to administer HBOS's clients' investments.
Portfolio Partners* returned a 266% increase in its 2005 pre-tax profit to A$10.4 million with funds under management increasing 20% to A$10 billion.
Total assets in Australia under management and administration (including Navigator, Aviva life insurance and Portfolio Partners) now exceed A$26 billion.
"The Australian under-insurance crisis received considerable publicity during the year, which prompted advisers to review client needs. This occurred at the same time as our ProtectionFirst initiative and delivered unprecedented sales of life insurance," Aviva Australia chief executive officer Allan Griffiths said.
"With continued good economic conditions, and the fact that we are delivering on our promise to our customers, I remain very confident about the year ahead. The first-quarter 2006 has continued the momentum we generated throughout the second half of last year.
"As a result of the winning team culture and the enhanced performance of Aviva Australia, I anticipate we will make further investments in dealer groups in 2006.
Commenting on the 2005 result, Aviva Australia chief executive officer Allan Griffiths said the company's performance had been robust.
"Strong equities markets and the knock-on effect of investor confidence, which has led to lower redemption rates for our Navigator platform and Portfolio Partners, have benefited the Aviva Australia group during the year.
"Anecdotally, we have also noticed a significant increase in superannuation inflows since the Federal Government removed the 12.5% superannuation surcharge."
Looking ahead, Mr Griffiths said 2006 was already shaping up as a year of profitable growth for the Aviva group in Australia.
"Our focus on claims management, business retention and enhancing our distribution capacity is making us a better business. Our preparedness to back our judgement by taking, or increasing, equity stakes in key dealerships have established an engine for growth within our business.
"What has driven our performance this year is the cohesiveness and stability of our entire team. We have been able to communicate our values and strategies effectively and engage our staff to a level where out-performance is the norm."
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[1] Includes Navigator Australia Limited, Norwich Union Life Australia Limited and Portfolio Partners Limited (the "Aviva Australia group".)
* Portfolio Partners is the Australian funds management arm of Aviva Plc. It now reports directly to the group's Morley funds management subsidiary in London and is a sister company of Aviva Australia.
For further information, please contact:
Simon Morgan
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0407 9666 32
Notes to editors:
- Aviva Australia is a group of two specialist financial services companies: Navigator and Norwich Union Life Australia Ltd. Portfolio Partners is the Australian funds management arm of Aviva plc. Through these companies we provide products and services in the areas of wealth creation and wealth protection for more than 300,000 customers throughout Australia.
- Globally, Aviva Australia is part of Aviva plc, the world's sixth largest insurance group, the largest insurer in the UK and one of the top five life companies in Europe. Aviva was formed in May 2000 through the global merger of CGU plc and Norwich Union plc.
- Aviva is a leading provider of life and pensions products to Europe and has substantial businesses elsewhere around the world. Its main activities are long-term savings, fund management and general insurance. It has premium income and investment sales from continuing operations of A$77.6 billion, and more than A$683.9 billion of assets under management (as at 9 January 2006). The group has around 59,000 employees and 30 million customers worldwide.
- The information in this document reflects Aviva Australia Holdings Limited understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. The information given in this document is of a general nature and has not taken into account the investment objectives, financial situation or particular needs of any particular person and it is not a substitute for professional advice. Applications to invest in a financial product issued by Aviva, or any of its related entities, must be made by completing the application form attached to the applicable Product Disclosure Statement ("PDS"). A PDS is available from Aviva or your financial adviser. Before making an investment decision on the basis of the information above, a prospective investor needs to consider, with or without the assistance of a professional adviser whether the information is appropriate in the light of their particular investment needs, objectives and financial circumstances. Aviva does not receive any remuneration in relation to the provision of information available from this press release which is of a general nature only.