Aviva sees sales decline

The insurance giant Aviva has seen a decline in world-wide sales in the nine months to the end of September. As of the end of the third quarter, total sales stood at £30,597m down 5% on the same period of 2010.

Not all the figures were as gloomy, however. The key "operating ratio" figure, which combines investment and underwriting figures to show whether Aviva is making a profit, stood at 96% in September, better than the 97% at the same point in 2010. A figure over 100% implies the firm is making less money from investments than it is liable for in insurance claims.

The "internal rate of return" figure has also improved from 2010, rising to 13.8% from 13.1%.

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Nevertheless, there will be concerns over the firm's capital position as economic storms rage across the Eurozone. The "solvency surplus figure" is £2.7bn, down on the same number at the end of June and significantly down on 2010 when it was £4bn.

Commenting on the results, Chief Executive Andrew Moss said:

"In general insurance we are seeing profitable growth and our life business continues to generate strong profits and cash flows. We have excellent customer franchises and despite the challenging sales environment in a number of European markets we remain on track to meet our financial targets this year."

Despite his fine words, Aviva's share price dropped sharply this morning, down 2.23% shortly after the open in London.

BS