This has been a major factor in the 21% decline of new business in its UK operations, the firm said, as it published its half year interim results this morning.

Value of new business fell from £224m over the first six months of 2013 to £177 million in the same period this year.
However, the company's UK life business grew life operating profit by 8% and cash remittances by 17%, while at the same time it reduced operating expenses by 11%.
Operating profit included a net additional benefit to profit of around £100 million from actions on its back-book.
It also announced strong net inflows onto its IFA platform, with assets under management now exceeding £4 billion, compared to £1.9 billion last year.
In a statement to the Stock Exchange, Aviva said: "Value of new business in UK Life declined 21% due to a 41% reduction in annuity VNB following the reforms announced in the 2014 Budget.
"We are supportive of the increased flexibility that the annuity reforms give our customers and with our broad range of products, including the recently launched Aviva Investors Multi Strategy fund range, we believe we are well placed for these changes."

{desktop}{/desktop}{mobile}{/mobile}

The firm's overall operating profits were 4% higher at £1,052 million. The firm said: "We are reporting improvement in all five of our key metrics, cash (+7%), operating profit (+4%), expenses (-8%), combined operating ratio (-0.7ppt) and value of new business1,2 (+9%3). This is despite a number of challenges in the period including an overhaul of the UK annuity market, a particularly harsh winter in Canada, UK floods and a stronger Sterling."