Aviva spent £21m ($25.2m, €23m) last year on resolving legacy cases involving defined benefit (DB) pension transfers in its UK life business.
Overall, the firm has provisions of £229m in compensation for Friends Provident customers, which is down from the £250m it outlined in 2018.
“Over 90% of cases identified are pre-2002 and are limited to advised sales by Friends Provident, where a number of external defined benefit pension arrangements transferred into Friends Provident pension arrangements,” Aviva said in its 2019 annual report, published on 25 March.
“We have completed a thorough and detailed review of the suitability of the advice given, and we will ensure that no affected customers are financially disadvantaged.
“There has been no significant change to the provision estimate or estimation methodology since 31 December 2018.”
UK life provisions
The firm had also set aside £175m for the “recognition of a new product governance provision” in its UK life business.
This relates to “past communications to a specific sub-set of pension policyholders, that may not have adequately informed them of switching options into with-profit funds that were available to them”.
It is restricted to a product originally sold between 1985 and 1989 and acquired by Aviva through the purchase of Friends Life.
The issue does not affect any other part of the firm.
Aviva said: “We are completing a review to identify and contact affected customers to ensure they are not disadvantaged.
“The most significant assumption in relation to the calculation of the provision is the estimated rates of customer switching.”
