Aviva pulls out of offshore bonds
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Aviva Life International will no longer offer new offshore bonds to customers from February 26.
The decision follows a strategic review of the firm’s business and a significant decline in demand for offshore investments from British customers and advisers.
From April 1, Aviva will transfer the administration of its closed book of business to Capita Life & Pensions Services, Ireland, as part of a third party supplier agreement. (article continues below)
The administration of the closed book will be managed from Dublin by Capita and a small Aviva team will be retained to oversee the operations. Most of the 75 employees will transfer to Capita in Dublin under TUPE (Transfer of Undertakings, Protection of Employment) regulations.
Existing customers and their policies are not affected by this decision and a mailing is being sent to them and to advisers.
“Our decision to close offshore bonds to new business reflects the significant decline in new business sales”
Aviva Life International is based in Dublin and provides investment solutions to customers resident in its core British market. It specialises in offshore investment solutions and is separate to Aviva’s other operations in Ireland.
Tim Madigan, the managing director of Aviva Life International, says: “Our decision to close offshore bonds to new business reflects the significant decline in new business sales across the offshore bonds market. However, we will continue to support our existing customers and their policies, and there is no change for them at all.”
In its latest new business results for the year ending December 31, 2009, Royal London 360 reported a difficult year for the offshore market with sales down in most markets by around 40% at the half year and single premium investments particularly badly hit.
Standard Life also said its offshore bond sales were 44% lower at £370m compared to £661m in 2008 due to the impact of the weak economic conditions experienced during the year.
