UK - Insurance group Aviva has become the latest to warn about pricing pressure in the UK's bulk annuities market after reporting a 6% decline in total annuity sales.

Aviva said its Norwich Union arm's annuity sales in the third quarter slipped to £1.16bn from £1.24bn a year earlier "as the company continued to price for profit rather than volume".

It said: "While Norwich Union is now actively quoting in the bulk purchase annuity market, entry into this market is focused on generating an increase in levels of value and the company will not participate in areas where it is unable to achieve adequate levels of return."

Aviva reported a 16% increase in overall new business profit for the first nine months of the year, helped by strong sales growth in its domestic market.

Last week rival Prudential noted more competition in the bulk annuities market - and added that it wouldn't budge on price.

There have been several new entrants to the market recently, including the Paternoster business set up by its former UK chief executive Mark Wood.

Speaking in September, Wood highlighted what he termed "gamesmanship" in the market as providers seek to win business. There was "internecine" competition between providers, Wood said.

Meanwhile today, Paternoster has appointed F&C Asset Management to act on its behalf as derivatives execution agent. Financial terms were not disclosed.

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