Aviva USA officials are painting a much rosier picture of their company's recent sales performance than is the company's London-based parent, Aviva PLC, which this morning said it is actively seeking to sell its U.S. subsidiary as a key part of its strategy to return the global insurance group to profitability.
The differences in tone underscores Aviva PLC's eagerness to divest itself of a U.S. subsidiary that under European financial regulations has become burdensome to own. Aviva USA, created when Aviva PLC acquired AmerUs Group Co. in July 2005, employs approximately 1,400 people in Iowa.
While Aviva USA CEO Chris Littlefield emphasized an 8 percent year-over-year increase in sales for the first nine months of the year to $4.9 billion, Aviva PLC Chairman John McFarlane in a release highlighted Aviva USA's 5 percent decline in annuity sales.
Aviva PLC noted that the profitability of new life insurance business for Aviva USA was "level," but that it expects annuity sales to decline.
"In response to the low interest rate environment we have taken pricing action, re-pricing equity indexed annuities three times this year," the company said in its release. "Annuity sales declined by 5% in 3Q12 compared with 2Q12 and we expect a further reduction in sales as a result of the actions we have taken."
The viewpoint was different at Aviva USA's West Des Moines headquarters, where Littlefield noted that Aviva USA's annuity sales increased by about 2 percent in the first three quarters of 2012 compared with the same period in 2011, "despite an ongoing environment of very low interest rates.
"Our financial strength and capital position also improved since mid-year, underscoring the confidence our key distribution partners, agents, employees and consumers place in us," Littlefield said in a statement. "I am proud of our team's hard work and our recognition as a leading producer of indexed financial products."