AVIVA is optimistic about its full-year profits in spite of its poor domestic performance in the first three quarters of this year. The firm’s domestic performance revealed a 25% drop in life and pension sales and was so weak, it dragged global sales down by 11% to a worse than anticipated £24.06 billion.
Aviva’s pension sales in the UK fell to £2.9 in the first three quarters of the year compared to £3.5 billion a year last year and protection insurance product sales decreased by 19%.
The recession has caused the UK’s pension industry enormous problems and protection insurance sales to drop considerably. Soaring unemployment rates have seen a shift in consumer focus with a drop in demand for pensions and savings products.
AVIVA explains the effect of the drop in demand for insurance and pension products on profit is being offset by a focus on quality rather than quantity and the positive developments in the stock market and predicts good total profitability for 2009.
As a result of this optimistic outlook, the life and pensions firm saw its shares rise by over 6% and its capital buffer expand by half a billion pounds to £3.7 billion.
So, in spite of a slow start to the year, it looks like the recession is not all gloom and doom and investors can indeed still profit.