(Bloomberg) — Aviva Plc more than doubled revenue from corporate pension deals in the first half as the U.K.’s second-biggest insurer looks to recapture business lost from the government’s initiative to remake the retirement system.
Chief Executive Officer Mark Wilson said today Aviva had underwritten 30 bulk annuity deals in the first six months of the year, increasing premiums to 260 million pounds ($438 million). The value of new business for the U.K. life unit, a measure of future sales, still dropped 21 percent as annuities tumbled 41 percent, the company said in a statement.
“You can assume that the hole post-the-budget has been filled and perhaps our annuities aren’t down as much as the market’s,” Wilson said on a conference call. “We have got more into the bulk annuity area so you will see more in the second half than in the first.”
About $6 billion was wiped off the U.K insurance industry’s market value in March after Chancellor of Exchequer George Osborne’s budget scrapped rules that pushed retirees to buy an annuity product. Legal & General Group Plc said yesterday its sees “tremendous opportunity” in bulk-annuity corporate deals in both Europe and the U.S.
Wilson said the impact from annuity sales accounted for less than 4 percent of the insurer’s operating profit and had been offset by an increase in other products.