(Alliance News) - Aviva PLC on Wednesday reported a strong start to 2020, with higher new business sales and net premiums, but warned of a performance below expectations for the year as a whole.
For the three months to the end of March, the FTSE 100 insurer said its Life & Savings business reported new business volumes at GBP12.3 billion, a 28% rise from GBP9.6 billion the same period the year before, while the value of new business rose by 18% to GBP311 million.
Meanwhile, for the UK Savings & Retirement segment, net fund flows increased to GBP2.3 billion from GBP1.6 billion through growth in sales across workplace and retail savings.
However, new business sales from the Europe Life dropped by 14% to GBP3.3 billion from GBP3.8 billion, as business volumes fell in Italy even as unit-linked volumes rose in France.
In General Insurance, global net business premiums rose by 3% to GBP2.4 billion from GBP2.3 billion, with 1% growth in the UK to GBP1.0 billion, Canada up 8% to GBP600 million and Europe up 2% to GBP700 billion.
Aviva said its investment portfolio has continued to perform well, with no defaults in its shareholder-backed corporate bond portfolio, and a low loan to value ratio and strong interest cover on commercial mortgages.
Only 5% of investments are in sectors that are the most directly impacted by the pandemic.
Looking ahead, Aviva said the Covid-19 outbreak has provided unprecedented uncertainty, and could adversely impact its results. Already the group has seen new business sales decline in the second quarter to date due to government-enforced restrictions.
For 2020 overall, sales volumes are set to be below expectations.
"We remain committed to achieving our 2022 targets, however, Covid-19 is expected to provide additional challenges to achieving these targets. We remain focused on enhancing customer and operational fundamentals to drive improved returns, better efficiency and cash-flow," the group stated.
Shares in Aviva were up 0.8% at 241.00 pence on Thursday morning in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Aviva (AV.)