Aviva shares soar on new business lift

SHAReS in Aviva surged yesterday as the struggling insurance giant delivered a solid start to the year.

The firm said the value of new business – a key measure of growth – rose by 18pc in the first three months of the year to £191m.

This was driven by increased demand in Asia and Britain, helping to limit the damage caused by weakness in Spain an Italy.

Shares jumped more than 7pc. The insurer also revealed it has slashed its costs to £769m – a 10pc reduction on the same period last year.

Delivering his first set of figures since joining at the start of the year, chief executive Mark Wilson said the firm was on track to hit its target £400m of annual savings by the end of the year.

This has come at a high price for employees, with the firm earlier this month announcing plans to slash 2,000 jobs – or 6pc of its global workforce – over the next six months. At least half of these losses will come in the UK.

Restructuring costs – including redundancy payouts – hit £54m in the first quarter.

The firm said this would increase during the year but would fall back over the longer term. Aviva’s life insurance arm, which includes pen- sions and investments, delivered a 33pc increase in the value of new business. This growth is expected to fall back over the year.

Performance in Southern european markets, including Spain and Italy, was described as ‘disappointing.’

Wilson said: ‘Progress so far has been satisfactory and there is a great deal more we need to do for our shareholders.’

Wilson joined after spiralling costs and poor share price performance triggered an investor revolt in 2012 that forced out former chief executive Andrew Moss.

Shareholders received another blow in March when the firm cut its dividend by more than a quarter.