SALES AT the Irish business of insurance company Aviva fell 43 per cent in the first quarter of 2009, as the market for life assurance products and pensions remained tough.

Aviva said the decline reflected “reduced demand across both retail and bancassurance channels with consumers being deterred by volatile equity markets, the slowdown in economic growth and property market uncertainty”.

Recent industry-wide figures from Life Strategies show the life assurance market declined 45 per cent in annual premium equivalent terms in the first quarter of this year, putting Aviva’s decline in line with the market.

In a trading update for the first three months of the year, the UK-listed insurer said its general insurance business in Ireland continued to be “affected by aggressive competition”.

However, its health insurance business was reported to be outperforming its competitors the VHI and Quinn Healthcare “by a significant margin” in terms of new members.

It has now increased its number of health insurance customers to 200,000, giving it a 9 per cent share of the market at the end of the first quarter of 2009.

Aviva’s worldwide sales climbed 5 per cent in the quarter to £10.3 billion (€11.6 billion), and group chief executive Andrew Moss said the insurer had increased its capital surplus.

“We continue to navigate a steady course through challenging times,” he said.