In the first quarter, the value of new business at Friends Life declined to £20m on £32m compared to the same time last year, primarily driven by a drop in retirement income, which plummeted by 73%. Protection was the only area of Friends Life’s business to grow, increasing marginally by 6% to £17m.
Aviva completed its acquisition of Friends Life in April this year in a deal worth £5.6bn, which is expected to add £600m to Friends Life revenue over the next two years.
Aviva’s life insurance business grew 15% to £103m in the first quarter, driven by higher equity release and pensions, which it said more than offset a reduction in annuity business. Annuities sales fell 73% to £136m on Q1 2014, in contrast to equity release which jumped 76% to £206m.
Mark Wilson, group chief executive officer, said the group had experienced an ‘acceptable’ start to the year.
“Aviva’s turnaround is on track and ahead of schedule. It’s been a busy quarter. We have completed the acquisition of Friends Life and at the same time delivered an improvement in our key metrics. Value of new business is up, our general insurance combined operating ratio has improved and our IFRS book value has grown over the quarter,” he said.
“Detailed plans to integrate Friends Life are well underway and whilst this is a challenging and complex project, we are confident of timely progress. We expect 2015 to be a year of continued delivery of our turnaround plan.”
