Wealth Manager - the site for professional investment managers

Register for full access to Citywire’s Fund Manager database, news and analysis. Registration is free and only takes a minute.

Aviva highlights regulatory challenges as annuity business falls 43%

Aviva highlights regulatory challenges as annuity business falls 43%

Aviva said its turnaround was progressing but still faced challenges, as the value of new business in its annuity business fell 43% over the year.

Across the Aviva business, the value of new business rose 13% to £338 million, compared to £208 million the previous year. However, the UK business suffered a 22% decline in the value of new business over the first quarter to £89 million, as its annuity business fell 43% on the same measure to £40 million over the year.

Its fund management business Aviva Investors, which itself is undergoing significant change under new chief Euan Munro (pictured) who joined from Standard Life Investments, saw a 4% decline in sales over the first quarter, after bringing in £730 million. The decline was largely due to currency movements. The quarterly figure represented a £147 million increase on the previous quarter.

The group said the decline in annuity sales was mostly down to a re-pricing exercise and a relatively strong first quarter in 2013. However it acknowledged the negative impact of Budget reforms and said it hoped an increased focus on bulk annuity sales would offset this.

Savings business in the UK and Ireland increased 5% from £1.1 billion to £1.2 billion. Protection sales increased 11% from £70 million to £78 million.

Mark Wilson, group chief executive, commented: 'Aviva still faces challenges both in the external environment and in the business as we progress our turnaround. The regulatory environment is constantly changing and soft conditions persist in certain general insurance lines. As a business we remain focused on cash flow, expense efficiency and the clinical allocation of capital to areas where we can maximise returns. There is still much to do.'

Aviva said it will continue to restructure, with expenses relating to the exercise at £18 million, compared to £54 million over the same period in 2013.

Last year the business saved £360 million costs savings of a target total of £400 million in 2014.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Investment Pulse: the highs and lows of 2014

Investment Pulse: the highs and lows of 2014

This week's Investment Pulse looks back at some of the biggest stories of the year as well as looking forward to 2015.

Play Inside ETFs: Why the US bull-run still has legs

Inside ETFs: Why the US bull-run still has legs

Global equities suffered a sharp sell-off in the third quarter but exchange traded fund investors are continuing to back the US to outperform in 2015

Play Paul Niven: I won't rip up the Foreign & Colonial Trust history book

Paul Niven: I won't rip up the Foreign & Colonial Trust history book

The newly appointed manager of the Foreign & Colonial trust talks about his plans for UK's oldest investment company.

Your Business: Cover Star Club

Manchester wealth firm hires Coutts director for London launch

Manchester wealth firm hires Coutts director for London launch

Former Coutts director Tony Robinson has joined Chartered Wealth Management to head the company’s newly opened London office.

Wealth Manager on Twitter