U.K.’s Aviva Turnaround Ahead of Schedule; 1st Quarter New Business Up 14%

By | May 7, 2015

Aviva plc said the turnaround of the U.K. insurer is “ahead of schedule,” as the value of its new business rose 14 percent in the first quarter.

The company, which completed its $8.6 billion takeover of Friends Life Group Ltd. in April, said VNB, an indication of future profit, was 247 million pounds ($376 million) compared with 224 million pounds in the year-earlier period, in a statement Thursday. VNB in U.K. life rose 15 percent to 103 million pounds, boosted by equity release and pension products.

“We expect 2015 to be a year of continued delivery of our turnaround plan,” Chief Executive Officer Mark Wilson said in the statement. “Detailed plans to integrate Friends Life are well underway and whilst this is a challenging and complex project, we are confident of timely progress.”

Wilson agreed to buy Friends Life in December to boost the insurer’s cash levels and pay down debt, accelerating his plan to overhaul the company after he joined in 2013. Some 1,500 job losses are expected to result from the deal as part of an estimated 225 million pounds in annual savings at the U.K.’s second-largest insurer by market value.

In general insurance business, the combined operating ratio, a measure of underwriting profitability, improved to 96.4 percent in the first quarter from 97.7 percent, the statement showed.

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