CGNU's market value tumbled by more than 5% yesterday after reporting disappointing growth of only 10% in first quarter life and pension sales, and thinner margins.
The UK's biggest insurer with its Norwich Union brand, which this week approved a world-wide group name change to Aviva, was seen by the market as falling behind rivals.
''The numbers were disappointing, the margins are eroding and the results were at the bottom end of expectations,'' said Tamzin Hobday, a director at WestLB Panmure.
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Shares eased 43.5p to 7285p.
CGNU's two major UK rivals, Prudential and Legal & General, both beat market expectations with new business gains of 26% and 34% respectively.
Life and pension sales in the UK, CGNU's main market, rose 15% in the first quarter, but profit margins fell as the firm sold more lower-margin pensions, including stakeholder. New business profit margins were down 2.6 points to 22.9%.
Craig Burke, analyst at BNP Paribas, said: ''In the UK they are coming in with growth less than Legal's and Pru's and their margins are going down, whereas Legal's and Pru's are going up.''
Another fund manager said CGNU would have to prove in the second quarter that while growth might slow, margins were stabilising. CGNU has underperformed the UK life assurance sector by 6% this year, amid a general wariness towards insurers after a raft of bad news and huge asset write-offs last year.
Richard Harvey, chief execut-ive, blamed weak stock markets, which hit sales of equity-backed bonds and other investment products, and some seasonal factors for the lower sales growth.
CGNU's life and pensions sales have increased 30% since the merger of CGU and Norwich Union two years ago, and the group has said its aim is to increase market share by a third to 15% by 2005.