British insurer Aviva has reported an increase in its capital cushion and said its first-quarter sales rose by a better than expected 11%.
Aviva, which last month suffered sharp share price falls due to concerns about its capital strength, said its solvency surplus had risen to £2.5 billion sterling by the end of March from £2 billion three months earlier.
The group also said it had life and pensions sales for the first three months of 2009 of £9.569 billion, up 11% on the year. Analysts had expected sales of £8.442 billion.
'Sales are resilient and we've taken action to improve margins in key markets,' Aviva's CEO Andrew Moss said.
Aviva said it had bolstered its capital position through increased contributions from operating profits and the proceeds of hybrid capital issues.
It also credited a 35% take-up by shareholders of an option to receive the final 2008 dividend in shares instead of cash, and said investors would be offered a scrip dividend this year as well.
Aviva said talks over a potential reattribution of a capital surplus in its with-profits funds were 'drawing to a close,' and that no decision had yet been taken.
The group has been locked in talks with a policyholder representative over the move, which would give the company the right to use the surplus in return for a one-off payment to customers, for more than two years.
