British insurer Aviva posted a 16% rise in life and pensions sales on Tuesday, boosted by U.S. business, with its newly acquired AmerUs unit making its first full quarter's contribution.
Britain's largest insurer said sales of life and pensions policies climbed to 7.75 billion pounds ($15.5 billion), a touch above an average forecast of 7.53 billion pounds from analysts.
Estimates from 16 analysts polled by the company had ranged from 6.82 billion to 8.11 billion pounds.
Aviva, which makes over 60% of its sales outside its home market and largely in continental Europe, said international life and pensions sales rose 25%.
In the U.K., where growth across the sector has slowed from a bumper 2006, Aviva said sales ticked 3% higher.
"The outperformance came from their new acquisitions, rather than from organic growth. The organic growth looked pretty much in line," said analyst Peter Eliot at Man Securities.
Aviva's stock, which has underperformed the U.K. life sector by 6% and fallen 3% since the start of the year, was up 1.7% at 788-1/2 pence.
Aviva raised eyebrows last year with its $2.9 billion acquisition of U.S. life insurer AmerUS. At the time of the announcement in July, analysts criticised the full price being paid for what they said was a second-choice deal -- coming just months after its 17 billion pound approach for U.K. rival Prudential was rebuffed.
But the company said Tuesday's figures proved it had benefited from the deal to boost its undersized U.S. presence.
Life and pensions sales in the United States, now Aviva's third-largest life business outside the U.K., saw a fivefold increase to 837 million pounds. Pro-forma sales rose 67%.
"It's clear we really benefited from this acquisition," Andrew Moss, Aviva's finance director and its incoming chief executive, told reporters. "We are very confident that this year Aviva USA will deliver new business growth of at least 20%, at the same level of margin."
Home Grown
At home, Aviva said it was pushing ahead with its efficiency review and with plans to improve persistency -- or the length of time customers keep a policy -- targeting its 200 poorest performing distributors.
Pensions sales, boosted in 2006 by pension reforms encouraging people to save more for retirement, were almost 10% lower in the quarter, but growth elsewhere helped total life and sales tick up 3%. Investment sales rose 48%, taking total long-term savings sales up 9%, with margins rising to 3% from 2.8% last year.
Aviva has said 2007 will see levels of growth below last year's bumper levels in the U.K., but it confirmed forecasts of 5-10% growth for the life market, with its own business aiming to grow at least in line with that.
A reshuffle of Aviva's top management announced on Monday included the departure of its well-respected U.K. head, Patrick Snowball. He is not expected to be replaced, as Aviva shakes up its top jobs to reflect its more international outlook.
International life and pensions sales, which now account for more than half the total, jumped 25% in the quarter, boosted by AmerUs, Ireland and Italy.
France, the second-largest market for Aviva outside the U.K., saw an 11% drop in sales, and the group said it expected ongoing weakness and a broadly flat 2007, as French investors remain cautious before the outcome of the presidential election and the intentions of the winning candidate become clear.
Profit from new business across the group climbed 17% to 271 million pounds, just above the average estimate.
The figures are on a present value of new business premiums (PVNBP) basis, which allows a better comparison of the sales performances of life assurance companies across Europe.