The news prompted Aviva Plc to release a statement from Amanda Blanc, Aviva’s Group Chief Executive Officer.
Blanc said: “Aviva is delivering consistently strong and profitable growth. In the first half of 2023 we grew sales, operating profit and dividends for our shareholders. Our excellent trading momentum is a direct result of the decisions we have taken over the last three years to re-focus Aviva. Today, Aviva has leading positions in growing markets, providing strong resilience in the current economic climate.
“In the UK & Ireland, general insurance premiums were up 13%, with healthy sales in both our commercial and personal lines businesses, where our Aviva Zero product has now attracted 250,000 new policies since launch. In Wealth, our market-leading Workplace business grew net flows by 25%. We continue to see very strong demand for private health insurance, with sales increasing by 58% as we expanded our services to corporate and individual customers. Our excellent Canadian general insurance business is also growing well, with sales 12% higher as a result of a strong performance in commercial lines, and the continued success of our local banking partnership.
“Aviva’s cash and capital position is robust and, in line with our guidance, we have increased the interim dividend by 8% to 11.1p, and estimate full year 2023 operating profit growth of 5% to 7%. We expect to make further strong progress with our clear strategy, growth opportunities in all of our markets, and the £1 billion investment well underway to accelerate our future performance.
“Aviva’s performance and prospects have been transformed from just a few years ago. Today’s Aviva is about delivery and momentum, and these results show that Aviva is consistently meeting its promises.”
Blanc concluded: “We expect to exceed our financial targets and we are making progress each quarter, as we said we would. I remain confident and excited that there is so much more Aviva can and will achieve.”
Adam Winslow, CEO UK and Ireland, General Insurance, also publicly stated: “Today, we report Aviva’s financial results for the first half of 2023. UK & Ireland General Insurance had an excellent six months, thanks to the hard work of teams across the whole business to deliver our plan and support our customers when it matters most.
He added: We have fantastic momentum, a clear strategy, and a strong track-record of delivery. And I’m confident that we’ll continue to deliver if we apply the same focus and dedication to the rest of the year. Thank you to all our customers, colleagues, partners and suppliers who have played a vital role in our 2023 story so far.”
A breakdown of Aviva’s results are as follows:
- Group operating profit‡,1 up 8% to £715m (HY222: £661m). Operating EPS‡,4 up 10% to 19.9p (HY222,4: 18.1p).
- Solvency II operating own funds generation (OFG)‡ up 26% to £648m (HY223: £514m). On track to exceed our target of £1.5bn OFG‡ per annum by 2024. Solvency II operating capital generation (OCG)‡ up 9% to £580m (HY223: £532m).
- Solvency II return on equity 10.8% (HY22: 6.7%).
- General Insurance gross written premiums (GWP)‡ up 12% to £5,274m (HY22: £4,694m). Undiscounted COR‡ of 94.8% (HY222: 93.8%) and discounted COR of 91.3% (HY22: 92.8%). Operating profit‡,1 up 29% to £470m (HY222: £364m).
- Insurance, Wealth & Retirement (IWR) VNB‡ up 7% to £319m (HY223: £297m), and operating value added‡ up 32% to £640m (HY22: £486m).
- Baseline controllable costs‡,5 flat at £1,340m (HY22: £1,342m), absorbing c.7% of inflation. With our continued focus on cost efficiency we now expect to deliver our 2024 target of £750m gross cost reduction a year early.
- Cash remittances‡ of £825m were up 3% (HY22: £798m). On track to exceed our target of >£5.4bn cumulative cash remittances‡ 2022-24.
- IFRS profit for the period6 of £377m (HY222,10: £198m loss).
- Interim dividend per share up 8% to 11.1p (HY22: 10.3p); £300m buyback executed in first half.
Capital position is strong and asset portfolio well positioned
- Estimated Solvency II shareholder cover ratio‡ of 202% (FY22: 212%) and centre liquidity‡ (July 23) of £1.6bn (Feb 23: £2.2bn).
- Solvency II debt leverage ratio‡ of 30% pro forma for planned debt reduction (FY22: 30%).
- Aviva’s high quality shareholder asset portfolio of £78.5bn (FY22: £78.4bn) continues to perform well and is defensively positioned.
Continued positive trading performance
- UK&I General Insurance GWP‡ up 13% to £3,219m (HY22: £2,840m) and undiscounted COR‡ of 96.3% (HY222: 95.3%). UK personal lines GWP‡ grew 16% driven by strong rate increases as we continue to manage the inflationary environment, as well as new product propositions. UK commercial lines GWP‡ grew 11% due to rate increases and new business growth.
- Canada General Insurance GWP‡ up 12% in constant currency to £2,055m (HY22: £1,854m) and undiscounted COR‡ of 92.8% (HY222: 91.8%). We saw excellent growth in constant currency of 17% in commercial lines and 8% in personal lines driven by rate increases and strong new business growth.
- Protection and Health sales7 were up 23% with strong growth in Health and Individual Protection. VNB‡ was up 18% to £118m (HY223: £100m) driven by higher volumes in Health together with beneficial assumption changes made in H2 2022.
- Wealth continued to show resilience in challenging market conditions with net flows‡ of £4.3bn (HY22: £5.0bn). Strong growth in Workplace net flows‡ was more than offset by lower net flows‡ in Platform.
- Retirement sales7 were up 17% to £3,223m (HY22: £2,762m) with strong growth in Bulk Purchase Annuities (BPAs) and Individual Annuities. VNB‡ was up 2% to £74m (HY223: £72m). The outlook for BPA volumes remains positive with a strong pipeline for the second half.
Aviva Investors external net flows‡ remained positive at £0.2bn (HY22: £0.2bn) and reflect the tough market backdrop.
Source: Aviva Plc
