LONDON (Reuters) - Insurer Aviva's (>> Aviva plc) new business rose at a healthy pace in the first nine months of 2014, helped by strong growth in Europe and Asia and also by a surprise improvement in the company's UK life business in the third quarter.
Mark Wilson, former boss at Asian rival AIA (>> AIA Group Ltd), joined Aviva as chief executive at the end of 2012 and has pushed a restructuring agenda across the group, selling off non-core businesses, cutting costs and improving profitability.
The changes come in response to disgruntled investors who rebelled against previous management after a run of poor returns, forcing out the company's CEO and chairman.
"We are in an entirely different position than we were two years ago," Wilson told reporters. "This is a self-help story, but there is still very much more to do."
Strong performance in Europe and Asia helped the value of new business, Aviva's key measure of growth in life insurance, to rise 15 percent to 690 million pounds.
The company also posted a surprise 18 percent jump in the value of new business in the UK life sector in the third quarter, which Wilson said was due to a pick-up in protection - protecting businesses against loss - and equity release business, and growth in bulk annuity sales.
Annuity providers have come under pressure following budget reforms which mean British savers will be given more access to their pension pots, with no obligation to buy an annuity, which gives an income for life.
Dominant players have sought to mitigate a slump in demand for individual annuities by building share in the bulk annuities market, selling the instruments in high volumes to companies looking to outsource all or part of their pension scheme liabilities.
In Asia, Singapore's DBS Group (>> DBS Group Holdings Ltd) has hired Morgan Stanley to find a partner to sell life insurance products in Asia under a new deal, after its pact with Aviva ends in 2015, people with direct knowledge of the matter said this month.
"We have an excellent partnership with DBS...we are of course very keen to keep it. As the incumbent, we are clearly in the favoured position," Wilson said.
"If we can (renew the deal) we will, but only if it's on the terms that make sense to us."
Credit Suisse analysts said in a note that "renewal of the DBS relationship would be desirable given it is an important distribution partner for the Asian business".
The company's general insurance combined operating ratio - showing claims as a proportion of premiums which is used by insurance companies as a measure of profitability - strengthened to 95.9 percent, compared with 96.9 percent a year ago. A number above 100 percent indicates a loss.
"The turnaround story within the group continues," said Eamonn Flanagan, analyst at Shore Capital, in a client note. But Flanagan reiterated his sell recommendation, adding that:
"Bulls of the stock may be disappointed that the overall pace of improvements has slowed."
Aviva's shares briefly rose nearly 1 percent before trimming gains to 515 pence at 0914 GMT, down almost 1 percent on the day.
(Reporting by Carolyn Cohn; editing by Susan Thomas; editing by Matt Scuffham and Susan Thomas)