Aviva results give insurers hope

AVIVA yesterday became the latest insurer to raise hopes of a recovery in the sector when it reported double digit sales resurgence in the fourth quarter of 2009.

The world's fifth biggest insurer said total life and pensions sales hit 8 billion during the last three months of2009 – up 21 per cent on the previous quarter. This pushed global sales to 36bn for the whole of the year, down ten per cent on 2008, but broadly in line with City expectations.

Sales in the UK market rose 17 per cent compared with the third quarter of 2009 but growth was stronger in Europe and the US, where sales rebounded 39 per cent and 45 per cent respectively.

Andrew Moss, chief executive of Aviva, said he was "cautiously optimistic" that the worst was now behind the industry.

He said: "All my gut instincts tell me that the third quarter of last year may be the low point in this economic cycle in terms of life sales."

The firm revealed it is now sitting on a 4.5bn capital buffer – double last year's sum – thanks to the sale of its Australian life business and the flotation of Delta Lloyd, its loss-making Dutch unit. There has been market speculation that Aviva is likely to use some of its cash pile to snap up firms in the Benelux financial services sector and the Far East.

David Barral, chief operating officer for Aviva Life, said the firm is currently focusing on "organic growth" but refused to rule out further acquisitions.

He told The Scotsman: "We are in an incredibly strong cash position now and we are going to give careful consideration to what we do with that but the focus is on organic growth."

Aviva shares closed up 4.3 per cent at 381p.