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Aviva's value of new business rises 14% to £247m in Q1

AVIVA plc has posted a 14 per cent growth, on a constant currency basis, in its value of new business (VNB) to £247 million (S$500 million) for the first quarter of 2015. VNB is a measure of the expected profits from new premiums written in the quarter.

This is attributable to growth recorded in its life business in the UK and Asia.

UK Life was the largest contributor to VNB, rising by 15 per cent to £103 million for the quarter, driven by strong equity release and pensions.

Protection VNB was down 60 per cent following last year's budget changes, said the UK insurer, adding that platform assets under administration rose 19 per cent to £6.3 billion.

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VNB from Asia (excluding South Korea) went up 16 per cent to £36 million, on a constant currency basis.

The strong performances in China and Singapore were partly offset by India, said the insurer.

In the developed European markets, VNB was up 11 per cent to £102 million on a constant currency basis.

The combined operating ratio in its general insurance business improved to 96.4 per cent in Q1 from 97.7 per cent in the year-ago period.

General insurance and health net written premiums rose 2 per cent in constant currency at £2.04 billion.

In the first quarter, Aviva said VNB of its latest acquisition, Friends Life, plunged to £20 million from £32 million a year ago.

This was driven primarily by a decline in retirement income VNB, following 2014's budget changes regarding annuities.

The Friends Life transaction was completed on April 10, 2015.

Mark Wilson, the group CEO, said: "Aviva's turnaround is on track and ahead of schedule. 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. 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 underway and whilst 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."