Aviva pulls back on annuities, sales drop
May 11, 2010 by Karen Mracek
By KAREN MRACEK • firstname.lastname@example.org • May 11, 2010
Aviva PLC reported a drop in new sales for the first three years of 2010, pushed down by a pull back in North American annuity sales.
The London insurance and financial services company, showed sales growth in Europe and the U.K. over the previous year, but growth in the U.S. was down 44 percent on a local currency basis in the quarter compared to last year.
This is “because of the specific actions we took last year to moderate the pace of our annuity sales and focus on capital efficiency,” the company said.
Aviva USA, which is building a headquarters in West Des Moines, has more than 1,500 employees nationwide and more than 1,000 in the Des Moines area. The company doesn’t report full earnings for the period ending March 30, but does provide sales information
“Aviva USA has had a great start to the year,” said Chris Littlefield, Aviva USA president and CEO, in a statement Tuesday. “Although annuity sales are down from the record levels of last year, we were able to significantly grow both our life and annuity sales on a quarter-over-quarter basis, while maintaining discipline on our margins and returns.”
While down record levels last year, overall life and annuity sales were up 24 percent from the fourth quarter. Life insurance sales in North America totaled $362 million in the three months ended March 30, compared to $265 million a year ago. “Our life sales growth is impressive when viewed against the backdrop of significant industry declines over the past year,” Littlefield said.
Annuity sales, meanwhile, totaled $1.13 billion in the same period compared to $2.7 billion a year ago. “We continue to see demand for our products and for guarantees,” Littlefield said, “and we will continue to focus on providing an exceptional experience for our customers – our distribution partners, producers and consumers — to ensure profitable growth for the future.”
Aviva Investors, which has its U.S. operations headquartered in Des Moines, reported investment sales of $1.56 million in the first quarter, a 34 percent gain in local currency over the same period a year ago.
“A highlight of the quarter was our acquisition of River Road Asset Management, a leading value-oriented US equity manager,” the company said. “The acquisition supports the expansion of our third party institutional business by combining existing fixed income expertise in North America with River Road’s equity investment capability.”
Shares of Aviva traded down 0.59 percent at $10.17 on the New York Stock Exchange at 1:30 p.m. CDT.