Analyst Note| Henry Heathfield, CFA |
Aviva reported steady results for first-quarter 2022 with some highs and lows but on balance a good result. In Aviva’s dominant life and savings unit, the value of new business increased 7%. This rise is almost wholly attributable to a higher allocation to illiquid assets backing Aviva’s annuities. Relatedly, the business also delivered an increase in the present value of new business premiums in this annuities and equity release line. That looks like a result of higher bulk-purchase annuity sales as market volumes started to rise. Aviva reiterated there is a healthy pipeline of BPA sales more heavily weighted toward the second half of 2022. Equity release also experienced higher sales during the first quarter, partially offset by lower individual annuity sales as retirement customers switched to this new form of income.