* 9-month life sales 25.5 bln stg vs 25.2 bln stg forecast
* Sees 200 million sterling cost savings by end 2012
* To sell Taiwan business amid focus on core markets
* Shares up 1.7 percent
(Adds fresh CEO comment, further detail)
By Myles Neligan
LONDON, Nov 2 (Reuters) - Aviva on Tuesday unveiled 200 million pounds ($318.8 million) in planned cost cuts and said it was set for "strong profitable growth" this year after sales for the first nine months rose in line with expectations.
Britain's second-biggest insurer said it would sell its Taiwanese business and exit other countries as part of a plan to concentrate on markets where it can make at least 100 million pounds in annual operating profits.
The company, which generates two-thirds of its sales in Britain and continental Europe, declined to name the countries it would quit, but said any retrenchment would be counterbalanced by investment in its better-established markets.
"We have some small businesses in a number of countries which are not going to meet our criteria," Chief Executive Andrew Moss told analysts.
"That doesn't necessarily mean they're on the block today."
Aviva shares were up 1.7 percent at 404.2 pence by 1304 GMT, outperforming the FTSE 100 share index, which was 1.1 percent higher.
"There is still significant low hanging fruit in the group which they are now highlighting," said Execution Noble analyst Joy Ferneyhough.
Aviva has responded to falling sales and worries over its capital strength during the financial crisis by cutting costs, boosting cash generation, and focusing on sales of its most profitable products.
JOB LOSSES
The company's latest 200 million pound cost reduction target, to be achieved by 2012, comes on top of 500 million pounds in savings between 2007 and 2009.
About half the new cost savings will be achieved in the UK, helped by the closure of Aviva's costly final salary staff pension scheme next year. No British job losses are planned, but about 200 jobs will go at Aviva's Canadian operation, Moss said.
Aviva's total life and pensions sales for the nine months to Sept. 30 were 25.5 billion pounds, up 6 percent compared with the same period last year, it said.
That was broadly in line with the 25.2 billion pounds pencilled in by analysts, according to the company's calculation of consensus expectations.
European life insurance sales have recovered this year after falling off in 2009 as the financial crisis deterred consumers from making savings and investment decisions, and as insurers wrote less business to conserve capital.
General insurance premiums have also risen, helped in the UK by a steady rise in car insurance prices.
"We are on track to deliver strong profitable growth and outstanding capital generation for the full year 2010," it said.
Because its business was evenly split between general and life insurance, avoiding excessive dependence on a single source of revenue, regulators let it hold up to 40 percent less capital than would be needed if the business stood alone, Aviva said.
The insurer in August rebuffed a 5 billion pound bid approach for the bulk of its general insurance arm from rival RSA. (Editing by Michael Shields) ($1=.6274 Pound)