Aviva bucks trend to increase assets in 2008
GLOBAL - Aviva Investors, the asset management division of Aviva Group plc, managed to increase its group funds under management last year and keep third-party assets stable, though profits earned from the division have fallen by over 20%.
Details of Aviva’s preliminary results for 2008 revealed the asset management operation, recently rebranded as Aviva Investors, saw its operating profit fall 2% to £114m last year buts its group funds under management rose 6% to £381bn (€bn) while assets managed on behalf of third parties “were stable” at £236bn.
Similarly, the firm said the return generated from fund management had fallen 31% from £179m in 2007 to £123m in 2008 under IFRS.
Little additional information is provided at this stage as to how the company’s assets performed, though officials acknowledged “the challenging conditions in global financial markets had an impact on both funds under management and our profitability”.
Aviva also said sales of life and pension products in Europe - where Aviva now has a presence in 15 countries and is targeting pensions business - are up 8% to just under £17bn although its new business gross margins have dropped from 3.2% to 2.8%.
According to the report, “growth in the developing economies of central and Eastern Europe offset more difficult conditions in the more mature markets of Italy and Ireland” while the firm also tapped the benefits of a weaker sterling against the euro.
Issuing a slight warning, however, the firm said it expected a “subdued business outlook across the region, particularly for long-term savings products [such as pensions] where the current economic conditions mean that consumers propensity to save is really low”.
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