LONDON - Britain's biggest insurer Aviva, which parted company with chief executive Andrew Moss earlier this month, posted long-term sales of 7.5 billion pounds during the first quarter, down 5 per cent on the same period last year

The first three months of the year saw a 5% drop in long-term savings sales and flat general insurance and health premiums, the company said giving few details on its bottom-line performance other than saying profitability was in line with targets.

Deputy chairman John McFarlane said: "Although the economic environment remains uncertain, we have delivered a solid operating performance during the first three months of 2012 and profitability in both our life and general insurance businesses is in line with targets."

Stating that the company has started the search for a new CEO both internally and externally, McFarlane said the exercise is expected to take the next six months.

McFarlane stepped in as the interim chief after massive protests by shareholders over Aviva's annual pay report led to the abrupt exit of Moss.

Reiterating his pledge to lift the group's financial performance, McFarlane disclosed that a strategic review of all the company's businesses is in the offing.

He described the first quarter performance as "solid" and said profitability in both Aviva's life and general insurance businesses was in line with target

Operating profits of the world's fifth largest insurance group for the first quarter were marginally down compared to the same period last year due to the sale of breakdown service firm RAC.

Long-term savings sales were 7.5 billion pounds, compared to 7.8 billion pounds in the first quarter of 2011, while general insurance and health net written premiums were at par with last year at 2.2 billion pounds.

The UK life business saw long-term sales increase 1% to 2.9 billion pounds, while life and pension sales, excluding bulk purchase annuities, increased 6%. UK annuity sales were slightly lower at 641 million pounds, compared to 645 million pounds last year.

One of the leading providers of life and pensions products in Europe, Aviva's 1.3 billion pounds exposure to the troubled eurozone economies of Portugal, Italy, Ireland, Greece and Spain also continued to hit the group, as life and pension sales in Italy and Spain tumbled 23%.

With its shares nearly 40% lower than a year ago, the group in its update on first quarter trading said its cash surplus was stable.

The group's IGD (Group regulatory capital) surplus was 3.2 billion pounds, around 1 billion pounds higher than at the financial year-end, and down 100 million pounds on the figure given when the group last updated.