Aviva Europe NWP up 3% despite drop in sales

Aviva said this reflected rating actions taken on motor business in France, Ireland and Italy.

Group chief executive Andrew Moss said: "Although we are mindful of near-term macro-economic challenges in some European markets, our regional spread and focus on optimising our product miox mean we remain confident about our long-term growth prospects."

Its European combined operating ratio improved to 95% (Q1 2010: 111%) driven by benign weather in both France and Ireland.

In it interim management statement, the firm said: "Our strategy centres on growing in our five biggest markets - France, Ireland, Poland and Spain - as well as in the growth markets of Russia and Turkey."

It confirmed: "Sales of with-profit products are down 39% against Q1 2010, primarily driven by disciplined management actions in Italy and France.

In France sales decreased by 18% to £1.27bn (Q1 2010: £1.55bn) but promotional activities with Credit du Nord increased unit-linked sales by 123%.

In Italy sales declined by 44% to £874m (Q1 2010: £1.57bn) but a joint focus with banking partners led to growth of sales of protection and unit-linked savings, which rose by 12% and 3% respectively, on a local currency basis.

Sales in Spain also decreased by 11% to £524m (Q1 201: £590m) and Aviva said were heavily impacted by both difficult market conditions, and low levels of consumer lending.

Polish sales decreased by 28% to £149m (Q1 2010: £206m) and Aviva said it had redirected its sales force there towards protection and unit-linked products, resulting in an increase of 16% and 27% respectively.

Ireland saw tough economic conditions but sales increased by 13% to £280m (Q1 2010: £247m), with protection sales increasing by 14% to £33m.

While record sales were achieved in Turkey, up 43% and in Russia sales doubled compared to Q1 2010.

Aviva added its partial disposal of its stake in Delta Lloyd, which was completed on 6 May, reduced its holding from 58% to 43%, generating total cash proceeds of £381m, and it will deconsolidate the results of Delta Lloyd going forwards. It added: "While the Benelux market continues to be challenging, Delta Lloyd is well placed to benefit from any future rises in equity markets and interest rates."

Finally in its Q1 results Aviva also confirmed a strengthening of its relationship with HSBC across Europe.