Aviva turnaround on track and ahead of schedule, says chief executive

Aviva flag on the company's heaquarters on Surrey Street, Norwich.For : Evening NewsCopy : Sam Willi

Aviva flag on the company's heaquarters on Surrey Street, Norwich.For : Evening NewsCopy : Sam WilliamsPhoto : Steve AdamsCopyright Archant Norfolk - Credit: Copyright Archant Norfolk Ltd

The chief executive of Aviva said the insurer's turnaround plan was 'on track and ahead of schedule' as it recorded a 14pc rise in the value of new business (VNB) for the first three months of the year.

Mark Wilson said the company had improved its resilience in the face of unpredictable global market conditions and capped a 'busy' start to 2015 with improvements across all key metrics and a £23m expansion in VNB to £247m.

While the performance update did not factor in Aviva's recent £5.6bn takeover of rival Friends Life, the insurer did reveal that it was closing Friends Life's office in London, as it pressed ahead with plans to strip 1,500 jobs and save £275m annually by 2017. It came as the insurer absorbed the financial impact on annuity sales sparked by the chancellor's pension reforms – which handed retirees the power to cash in their annuities – by bolstering VNB in its UK life insurance business by 15pc to £103m.

The firm said the strong performance was triggered by higher equity release and pensions, which helped offset the drop in new business for annuities.

But the pension shake-up announced in last year's budget had a profound impact on Friends Life, which saw a £12m decline in the VNB to £20m.

Elsewhere, the general insurance business recorded a combined operating ratio of 96.4pc, an increase of 1.3pc, while its Norwich-based UK general insurance business reached a combined operating ratio of 98.3pc.

In a statement, Mr Wilson said: '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.

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'Value of new business is up, our general insurance combined operating ratio has improved and our IFRS book value has grown over the quarter. In the face of unpredictable global markets, we continue to improve the group's resilience.

'Detailed plans to integrate Friends Life are well under way and while 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.'

Aviva, an EDP Top100 company, employs around 28,000 staff worldwide including 12,000 in the UK at offices in Norwich, York, Sheffield and Glasgow.

Do you have a business story for the Eastern Daily Press? Contact business editor Ben Woods on 01603 772426 or email ben.woods@archant.co.uk