Aviva reaffirms commitment to 'advised' products

Aviva will expand its distribution channels through e-commerce in 2010, but has no plans to move deeper into the online direct-to-consumer space, says the head of the insurer's UK Life arm.

The company has seen a "significant" shift towards writing business online through the use of its adviser portal and plans to enhance this capability in line with demand, Toby Strauss says.

"Last year all our valuations on bonds were done over the phone, with bits of paper coming through at the end. Now advisers are just going through the portal."

But he says the trend is still very much for advised products, whether from Aviva's advisers or IFAs.

"In terms of selling, our view is this sector will continue to be one in which people want advice. On the direct to consumer side we are offering more in terms of servicing our existing clients, but not selling."

Aviva is also working closely with bancassures to "evolve" a model which clearly separates advice and product, similar to the one advisers must adopt by 2013 under the RDR, Strauss says.

The group reported today its UK life and pensions sales fell 25% in 2009 from £11.8bn in 2008 to £8.9bn last year, while operating profit fell 10.5% to £672m, it reported today.

Strauss says the outlook for 2010 is improving and the insurer will particularly look to improve its retirement offering this year as the UK's baby-boomer generation start to hit pension age.

"There will be greater focus on variable annuities, equity release and de-risking defined benefit schemes. People want to manage income from different places at different stages in their retirement, and we are starting to adapt to support that as we shift to see the baby boomers retiring."

Strauss also down-played rumours Aviva may bid for rival Prudential's UK arm. Shares in Pru slumped 16% following the announcement of its plans to raise $20bn in a rights issue to fund a deal for AIG's Asian life-insurance unit.

"As Andrew [Moss, Aviva's chief executive] said, we have no plans regards Pru. Though one never rules anything out."