Aviva secures deal with CIS together with rise in operating profits |
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Fri, 12 Aug 2005 13:05
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Leading insurance firm, Aviva has joined hands with Co-operative Insurance Services (CIS) for the distribution of certain Aviva products through the huge sales team available at CIS.
Under the pact, the Norwich Union owner, Aviva will be independently supplying personal pensions, unit-linked bonds as well as services pertaining to inheritance tax planning with the help of the country’s biggest sales force of the Co-operative. CIS, meanwhile, will promote life insurance products of Norwich Union amongst its clientele.
Co-operative Financial Services’ chief executive, David Anderson, informed further that in spite of CIS presenting its own items together with Norwich Union's products, the Co-op would hereafter focus more on Norwich Union and was considering termination of its particular services. He said, “We will look carefully at our ability to manufacture each product category, and will look at how well we can do that and how well another provider can do that.”
This deal followed Aviva’s positive interim results that fulfilled profit forecasts by analysts, displaying as much as a 21 % increment in its operating profits as against last year. About 5.4 per cent rise was witnessed in the operating profits of its entire life insurance and pensions products, with a 12% sales increase.
Despite its robust performance, Aviva acknowledged that profit margins were quite sensitive in the insurance sector now with increasing competition and the tightening market conditions caused by the slump in the housing market. Aviva’s business in continental Europe flourished immensely over the period as life and pension products’ operating profits jumped by 12%, along with general insurance profits that shot up by 20 per cent.
Chief executive of the insurance firm, Richard Harvey, said, “The recovery has not really started in the UK savings marketplace. So we have rather subdued figures. We don't expect the recovery to start for around six to nine months.”
He added that Aviva was intent on more purchases outside Britain, saying, “Across continental Europe, we continue to look for deals similar to ones we've done in the past... which have secured us distribution through the bancassurers.”
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