Aviva threw its weight behind its fund management arm, Morley Asset Management, yesterday, despite the recent loss of Katherine Garrett-Cox, the fund manager’s £1 million-a-year chief investment officer.

Philip Scott, the executive director of Aviva’s international business, said that Britain’s biggest insurer was “absolutely 100 per cent” committed to keeping Morley within the group, despite criticism that the business’s turnaround was taking longer than expected.

Ms Garrett-Cox’s announcement last week that she was resigning to join Alliance Trust, the £2.8 billion generalist investment company, came months after Keith Jones, Morley’s chief executive, had quit amid speculation that Richard Harvey, the outgoing Aviva chief executive, was dissatisfied with Morley’s performance.

Mr Scott, who will retain group responsibility for Morley when he replaces Andrew Moss, the Aviva chief executive-designate, as finance director in July, said that he was looking forward to working with Chris Phillips, the new Morley chief executive.

Yesterday Mr Scott was unveiling Aviva’s new business figures in global long-term savings for the year to December 31, 2006, which were up 22 per cent on the previous 12 months to a record £31.1 billion.

International sales rose 13 per cent to £17.1 billion, helped by AmerUs, the American insurer that Aviva bought for £1.6 billion last November. AmerUs reported record fourth-quarter sales, including £324 million in new business in the six weeks between the acquisition and the year-end.

In Britain, Norwich Union, reported a 35 per cent rise in sales to £13.9 billion, but the insurer will take an estimated £361 million hit on this sales figure after higher than expected numbers of policy-holders stopped paying into their savings products earlier than anticipated.

Mr Scott said that, although figures had not yet been finalised, he expected growth in the UK long-term savings market to breach 20 per cent for 2006, after legislation to simplify pensions taxation gave all insurers a big boost. He said that an additional 5-10 per cent growth could be expected in 2007.

Aviva said last year that it would enter the bulk annuity market, but so far has found the area too competitive. “The pricing hasn’t attracted us in,” Mr Scott said.

Analysts gave a muted response to the results, which were slightly above consensus. James Pearce, of Cazenove, described Aviva’s outlook as “generally favourable”.

Tim Young, of Collins Stewart, pointed out that Aviva’s UK growth, although significantly ahead of its rival Prudential, which put on only 1 per cent on the previous year, was lagging that of AXA, at 38 per cent, and Legal & General, at 42 per cent.

Bruno Paulson, of Sanford Bernstein, said that the strong results from AmerUs would help to justify what had been a controversial acquisition.

Business big shot: Philip Scott

Being finance director of an insurer is a mind-boggling task — there are three methods of financial reporting, as well as tax issues of a complexity that would make most executives feel faint.

Philip Scott, however, is looking forward to becoming Aviva’s finance director in July. The 53-year-old reasons that it will mean less time in airport lounges, which have become a home away from home since 2003, when he took responsibility for Aviva’s international life assurance business.

Mr Scott is considered by outsiders to be something of quiet star in a company of big personalities. The keen sailor and gardener joined Norwich Union, Aviva’s UK business, as a trainee actuary in 1973. After working in a number of roles, including chief executive of Norwich Union’s life business, where he played a large part in its demutualisation and merger with CGU to form Aviva, he became executive director in charge of Aviva Life International. Since taking charge, he has driven the group’s bancassurance business and sped up Aviva’s expansion in China. He oversaw last year’s acquisition of AmerUs.

Married with one daughter, the keen apple grower runs a cider-making cooperative from his farm in Norwich in his spare time.

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