Wealth management and life insurance provider MLC expects good returns from the buyout of Aviva Australia after net operating income fell 15% in the year to September.

The National Australia Bank (NAB) subsidiary reported net operating income of $1.07 billion during the period, against $1.26 billion last year.

A 13% increase in annual inforce premiums was partly offset by a 9% fall in insurance cash earnings due to higher lump sum death claims and disability claims and lower earnings on assets backing reserves.

Funds under management fell 19% during a volatile year to September.

MLC expects the $825 million acquisition of Aviva Australia to “add scale, efficiency and new capabilities” to the business.

The deal added $256 million in inforce life premiums to an existing book worth $874 million, which it claims makes MLC the biggest Australian life provider by market share.

An MLC spokesman told insuranceNEWS.com.au the Aviva brand will be used for 12 month before branding is “determined in due course”.

“Aviva also has strong relationships in the external financial adviser markets, opening up new sources of growth,” NAB said in a statement.

NAB reported a 43% fall in net profit of $2.6 billion.