A cut imposed last October in commissions Norwich Union pays to financial advisers who sell its personal pensions has squeezed the growth out of its sales.
In the first three months of this year life and pensions sales by NU's parent company Aviva rose by only one per cent from the first quarter of 2004, while its sales of investment packages were 17 per cent down.
This was offset by strong gains in several continental countries so that Aviva's worldwide sales were 17 per cent ahead at £6.134 billion - measured by a new European measure for estimating the value of the new business of insurance companies.
Aviva is the first company to adopt this standard, which consists of 100 per cent of one-off investment sales plus the present, discounted, value of the future premiums to be generated by sales of new regular-premium contracts.
Sales on continental Europe during the first three months of the year rose by 31 per cent to £3.27 billion, or 58 per cent of Aviva's global total. By the same measure, UK sales fell to £2.349 billion.
"We only want to write profitable business that doesn't impact on shareholder value," an Aviva spokeswoman commented on the decision to cut commissions.
Yesterday the shares fell 15p to 5771/2p.
"Our long-term savings business is prospering," Richard Harvey, Aviva's chief executive, declared. "We are delivering good growth while maintaining our focus on shareholder and customer value.
"Europe is Aviva's primary market and is delivering healthy margins in many markets, including the UK, France and Spain. Sales are growing faster in continental Europe than the UK."