British insurer Aviva says 'very low' risk of eurozone defaults

11th May 2010, Comments 0 comments

The boss of British insurer Aviva on Tuesday said there was a "very, very low" risk that Greece, Spain or Portugal would default on government debt.

Chief executive Andrew Moss, speaking to reporters after Aviva gave a trading update, said the risk of default was "unequivocally very, very low in our view."

The comments come after the European Union and the International Monetary Fund gave their backing to a one-trillion-dollar (750-billion-euro) rescue package for crisis-hit euro countries to prevent contagion from Greece.

"It has been clear some European countries' budget deficits need to be resolved over time," Moss said.

"Therefore, seeing action with the larger countries in the European Union standing behind sovereign debt at this point is helpful, but the reality is that some of these countries would have to take action within their own economies to address their issues."

In the trading update, Aviva said its total exposure to debt securities of the governments of Greece, Spain and Portugal stood at 900 million pounds (1.16 billion euros, 1.33 billion dollars), with Greek securities accounting for 150 million pounds.

Aviva also revealed a drop in sales of new life-and-pensions agreements in the first quarter, hit by lower contributions from North America.

Britain's second largest insurer said new sales fell 4.6 percent to 9.13 billion pounds in the three months to the end of March. That compared with 9.57 billion pounds in the same portion of 2009.

- Dow Jones Newswires contributed to this report -

© 2010 AFP

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