Aviva Full-Year Sales Up 8%, Dividend Unchanged

British life insurer Aviva reassured investors on its capital strength on Wednesday and said its dividend policy was unchanged as it reported a better-than-expected 8.6 percent jump in full-year sales.

Aviva, the UK's biggest life insurer, said its 2008 life and pension sales reached 34.58 billion pounds ($49.8 billion) on a European embedded value basis, up from 31.6 billion the previous year.

Analysts had expected sales of 33.52 billion, according to the average of 17 estimates collected by the company.

Aviva also reported a strengthening of its capital surplus and said it had made no changes to its dividend policy.

Shares in life insurers have come under pressure due to investor concerns that a deteriorating investment performance might erode their capital reserves, potentially forcing dividend cuts.

"Our capital position remains strong and Aviva continues to be attractive to customers seeking security for their long-term savings," Aviva Chief Executive Andrew Moss said in a statement.

Aviva had a capital surplus of 2 billion pounds at Dec. 31 2008, the company said, and estimated that it would still have a buffer of 1.3 billion if equity markets were to fall another 40 percent.

In October last year, Aviva reported a capital surplus of 1.3 billion pounds.

Aviva also said it planned to renegotiate a deal to reattribute a surplus which has built up in its with-profits funds which would have led to policyholders receiving a windfall payment of 1 billion pounds.

"Continue market volatility and uncertainty means that the original reattribution offer for the inherited estate no longer meets our critical test of being fair to both policyholders and shareholders," the company said.

Aviva shares closed at 332-3/4 pence on Tuesday, valuing the company at about 8.8 billion pounds.

The stock has fallen by about 50 percent in the past year.

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