Aviva warns on Turner's national pension plan

Aviva, the UK insurance giant, said yesterday it was confident it could maintain its position in the pension market without taking part in Lord Turner's proposed National Pension Savings Scheme (NPSS), warning it would walk away from the project if the margins were insufficient.

Talking as the company announced its 2005 new business figures, the executive director, Philip Scott, said the company would not take part in the NPSS if it did not provide shareholders with an adequate return on capital. He added that he did not agree with predictions that mass auto-enrolment into the NPSS would sound the death knell for the rest of the pensions sector.

"We don't think it's a must to participate in [the NPSS]," he said. "We certainly don't see the NPSS as being the only vehicle in the marketplace. We will seek to operate where we can provide quality products for our customers and provide good returns for our shareholders on capital employed."

Mr Scott said sales across the group rose 10 per cent in 2005, slightly above analysts' expectations. In spite of a year-on-year fall in UK pension sales, because of changes in the company's commission structures, an increase in annuity and bond sales helped to keep total UK life and pension sales roughly flat for the year.

The group's UK investment arm saw a 35 per cent rise in sales, while sales in itsinternational long-term savings business, which accounts for almost 60 per cent of revenue, rose 16 per cent. Mr Scott played down speculation the group was keen to make an acquisition in the US. He said Aviva was focused on organic growth, but would consider acquisitions across the world if they were value enhancing.

He defended the company's move to explore the reattribution of its with-profits orphan assets. He said the group would press ahead with the process only if it would benefit shareholders and policyholders.