Pru's deal for AIG arm will weigh on life firms
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Aviva group chief executive Andrew Moss says that Prudential’s embattled £23.5bn acqu-isition of AIG’s Asian arm AIA will “weigh” on the life insurance sector.
During a results conference call on Tuesday morning, Moss said the proposed £14bn rights issue to fund the deal, which has been stalled by the FSA due to capital adequacy concerns, will affect other insurers.
He said: “If money is going to be taken out of the sector in the sort of size we are talking about in the Pru rights issue, then the money has to be found somewhere and therefore in the context of the timetable one would expect it to weigh on the sector through that period.”
Meanwhile, Aviva reported stable quarter one life and pension sales for the UK of £2.56bn, slightly up year-on-year from the £2.5bn in the sameperiod last year.
Total annuity sales jumped by 85 per cent to £877m from £475m as well as showing 35 per cent quarter-on-quarter growth.
Bulk purchase annuity sales shot up by 1,129 per cent to £344m from £28m in the fourth quarter. Equity release sales were up by 52 per cent quarter-on-quarter and 16 per cent year-on-year at £96m.
Protection sales increased by 1 per cent on the previous quarter but were down by 6 per cent year-on-year at £165m.
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