AVIVA is opposing a UK proposal to force pension funds to back more British start-ups in a bid to keep London competitive with rival finance hubs like New York, the CEO of the FTSE 100 firm told Reuters on Wednesday (May 24).

British officials are drawing up a blueprint for a proposed £50 billion (S$83.7 billion) ‘Future Growth Fund’ for local start-ups, which could be supported by a government mandate for pension funds to invest a proportion of their funds.

“We’re big supporters of investing in the UK... However, we are not supportive of a mandated participation,” CEO Amanda Blanc said, after the insurer and asset manager reported mixed first quarter trading figures, sending its shares down 3 per cent.

“We do not feel that creating a complex and bureaucratic fund... is the right way forward at all,” Blanc said, adding that pension fund trustees needed to make the right decisions for them.

Veteran banker and current lord mayor of London Nicholas Lyons told Reuters this month he was in advanced talks with FTSE 100 asset managers on setting up the Future Growth Fund, but said he did not view a government mandate as a deal-breaker.

The British government is expected to lay out plans to boost pension investment in the coming months. The opposition Labour party is prepared to compel pension funds to invest in the Future Growth Fund if it takes power, the Financial Times reported this week.

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Aviva has undergone a shake-up under Blanc to drive up shareholder payouts but is contending with claims inflation and choppy market conditions like many rivals.

The company reported growth in key business lines in the first quarter including an 11 per cent jump in general insurance premiums to 2.1 billion pounds, but a slowdown in net flows to its wealth business after a volatile period for markets.

Analysts at JPMorgan said the figures were “mixed”, and that the company’s capital ratios – including a solvency ratio of 196 per cent – came in slightly lighter than expected.

Aviva shares were down 3.1 per cent at 0813 GMT, against a 1.4 per cent drop in the wider FTSE 100 index.

A 25 per cent jump in private healthcare sales in the quarter reflected concerns about the capacity of Britain’s National Health Service, which provides free and discounted health and dental care.

“That’s as a consequence of what we’re seeing in the NHS and customers basically saying that if they can take control over their health situation then they will,” Blanc said, adding they had gained 123,000 customers in this area over a year. REUTERS