Dame Amanda Blanc

VOICE OVER: We’re Aviva.

With our customers today, for a better tomorrow.

All 20 million of them.

Supporting them through all the key moments in their lives, by being the go-to brand

for their insurance, wealth and retirement needs.

Today, we’ve released an excellent set of full year results.

Thanks to the hard work and dedication of our colleagues,

making it click for our customers, clients, communities, shareholders and each other.

1.76 billion of operating profit.

Underlying SII Own Funds Generation at £1.5bn.

Undiscounted COR at 96.3%.

Solvency II cover ratio is 203%.

2024 total dividend per share is 35.7p.

We have momentum.

We’re growing right across the Group.

We’re consistently delivering for our customers and we're excited about the future.

MICHAEL KORNER: Amanda. Great to be here with you today to talk about our full year results.

Could you start just by sharing some of the headlines in your own words?

AMANDA BLANC: Well, first of all, thank you very much for doing this, Michael.

It's really great to be here.

And actually, I think when you look back at 2024, what you see from Aviva

is a really excellent set of results with strong and consistent delivery.

So what does that mean?

Well, I think what we've seen is great growth right across the business.

And that's translated into double digit growth in operating profit, double digit growth in our underlying Own Funds Generation, and strong cash remittances, which of course are our three key targets.

So I think, you know, this is an impressive set of results, and we're very, very pleased with them.

MICHAEL KORNER: That's fantastic to hear. Now could you talk some of the highlights from across the Markets?

Yes I can and there are lots of highlights.

So let's start with the UK and Ireland General Insurance.

Firstly your own part of the business, Aviva Zero has had a really great performance in 2024, but the overall business has had strong performance. Plus 16% growth overall.

You've seen really strong growth in Personal Lines but also strong growth in Global Corporate Specialty and the mid-market and SME business.

So, overall very, very strong performance.

Turning now to Canada.

Canada clearly had strong growth, double digit, but they also had CAT events during 2024.

A significant number of events, lots of customer claims.

But they handled them brilliantly with really, really good market leading customer service.

Turning now to IWR, Insurance, Wealth and Retirement.

Let's start with the Insurance part of that business.

Strong and profitable growth in the Health business.

In Protection we've integrated the AIG business.

Then if you look at Wealth, we've had a terrific year, £200 billion of assets.

We’re the largest wealth platform in the UK.

And just to put that in some sort of context, we've grown by £50 billion over the last two years.

So we've seen strong growth both in Workplace but also on the Adviser Platform.

And finally, if we think about the Retirement business, we've had record flows in the Bulk Purchase Annuity business, which is, you know, incredibly strong.

And that has been supported by Aviva Investors who have originated assets

to back that business.

MICHAEL KORNER: Sounds like we've got strong organic growth across all of our markets.

Now, a large part of our strategy is about becoming capital light.

Can you tell me a bit more about that?

AMANDA BLANC: Yes. So, as you know, we have an ambition to reach 70% of our business capital

light by 2026.

And why do we use this expression capital light? Why is this important?

Well, obviously, if you're growing the business but using less capital to do that, then the business is going to be more profitable.

And that's really good for our shareholders.

And I think through the organic growth that we've achieved in the business, but also the targeted M&A that we've already undertaken, so AIG and Probitas, it means that we are making really good progress towards that ambition.

Now, clearly with Direct Line Group, that gives us the opportunity to accelerate that even further and that's why that is so exciting.

Thank you. Can you say a bit about how we’re delivering for our customers?

Yes. I mean obviously the customer is at the heart of Aviva’s strategy. And with 17 million customers in the UK and over 20 million customers, if you include Canada and Ireland, I think we've got a huge responsibility to make sure that we do a really good job for our customers.

So we've done loads of things in 2024, but maybe I'll pick up three things which I think are,

you know, really important.

Firstly, we launched the new MyAviva app.

So as we call it, the digital front door, which sounds pretty fancy, but what it really means

is the customers get better digital journeys.

And what we've seen there is the Online Experience Score increasing to over 70% in 2024,

which I think is a really strong progress for us.

Then secondly, if we talk about this very big topic of generative AI and, you know,

obviously everybody's really keen on this at the moment.

But here what we've done is for our claims agents, we've used generative AI so that when the customer is actually dialling in, we're using generative AI behind the scenes to call up the customer details, everything that's happened on the claim so that when the agent

speaks to the customer, they've got that information in front of them and also, the likely question that the customer is ringing up about, which I think is really clever

and also means the customers are not kept waiting on hold. And we've seen nearly half

of our agents now using that in Motor. So I think that's great.

And the third area that's worth pointing out is our service called Find and Combine. And here what we do is help our customers to pull together workplace pensions that they may have had from previous employment into one place.

MICHAEL KORNER: Turning now to our shareholders. What's the message for them today?

AMANDA BLANC: So there's five messages for the shareholders today.

The first one is Aviva is the go-to diversified insurer in the UK with attractive businesses

in Canada and Ireland.

Secondly, we have a customer focused strategy. Thirdly, we have organic growth opportunities across the UK, Ireland and Canada, in all lines of business.

Fourthly, we spent the last four years delivering and we've shown a consistent track record of delivery.

And finally, we're delivering superior returns for shareholders and that can be further enhanced with the acquisition of Direct Line Group.

MICHAEL KORNER: And finally, what would you like us to take from today's results?

AMANDA BLANC: So I think what you see here is a business that’s performing, right. It's got momentum, but there's still a huge amount more to go after.

So everybody should be really excited about what the opportunities are.

And of course, that's created by the great people that we have within the business.

If you think about all of our colleagues working really hard for our customers, what I want to do today is, of course, the key message to them is to say: thank you very much, but please don't stop.

MICHAEL KORNER: Thanks so much for your time, Amanda. It's been great talking to you today.

AMANDA BLANC: Thank you, Michael.

STEVE SEDGWICK: Dame Amanda Blanc, who is the CEO of Aviva. Amanda, thank you very much indeed for joining Karen, myself.

AMANDA BLANC: Good morning. You've had a busy morning.

STEVE SEDGWICK: We had a busy morning, but we've saved the best till now. I hope all the other CEOs aren't watching.

But in terms of the numbers, I mean, I've been trying to pour through this, this 71-page document.

Karen's been doing the same and interview all these CEOs at the same time.

I'm yet to find something that would be troubling for you as well.

Why are you firing all cylinders at the moment?

AMANDA BLANC: Well, I think the business have got real momentum.

And you know this what this is what happens when businesses are performing, success breeds success.

And if you think about the operating profit, which you said, you know up 20%, we're on track to hit all our targets.

But that is driven by strong underlying growth in all areas of the business.

So, if we think about the general insurance business, we're up 14%.

In the retirement business we're up 33%.

In the wealth business net flows are up 23%.

So, you know that that is then driving strong customer.

So, we've got 20 million customers, 1.3 million net new customers just in the last year alone.

So, you know, it's good and, and that's going through to the shareholders obviously, which is great for them.

Over £10 billion in four years run up as well.

Yeah, we've had a yeah, we've had a really good run up.

KAREN TSO: General insurance premium though up 14%.

To me that triggers that phrase around services inflation.

Why is 14% still the number as we talk about inflation coming back, particularly in markets like Europe?

What is the, the normal rate of increase we should be seeing?

AMANDA BLANC: So, you have to remember this has come off a number of years where inflation, particularly for motor insurance was really high because you had used car prices increasing, you had supply chain issues.

And so, rates had to go up to accommodate that, coming off the back of very low rates post COVID where frequency was low.

So, I think what you're seeing is the flow through because obviously the way that rate earns through an insurance, it takes 24 months for the for the rate to earn through.

You're seeing some benefit of that, but we have grown very, very strongly in our retail insurance business, particularly in the UK, where in retail motor, for example, we're up by 31%, which I think is really smart trading from the team because they're basically writing business at the top of the market.

So, you know, it's good trading.

STEVE SEDGWICK: In terms of the growth of the asset under management to £407 billion.

Where are you going to take that next?

Is that that's going to become even more part of the business for you, which primarily people look and say it's an insurer rather than an asset manager.

AMANDA BLANC: So, I mean, we would say a wealth player if you think about the AUM. So, we have a big workplace business, 4.8 million members in the workplace business.

That platform is £129 billion. It's the biggest platform in the UK and we have £200 billion of AUM on our advisor platform and the wealth platform. If I go back four years, that was £85 billion less.

So, you can see the real momentum there as defined contribution pensions grow as people are investing more on platforms. Our platform is performing very, very well.

It's a real sort of momentum play.

STEVE SEDGWICK: Why does the Chancellor in the UK generally have a problem with people wanting to reinvest back into United Kingdom?

Are you under pressure to come up with products that make it more exciting to invest in UK businesses?

AMANDA BLANC: Well, I mean if you think about Aviva, our annuity book is 68 billion, £40 billion of that is invested in UK, £30 billion in UK infrastructure and we've invested £10 billion since 2020.

So, we are big investors in the UK.

It's important for us for the UK to do well and we've committed to investing £25 billion over the next 10 years with our annuity business.

So, you know what we need is the long-term thinking, what are the projects, what's the certainty around those projects?

Then obviously the planning, get that bit done and then we're ready to invest.

STEVE SEDGWICK: Sorry, I've got to follow up on that.

What I get from your answer there that the chancellor hasn't offered you the answers to those questions?

AMANDA BLANC: Well, I mean, I think there's things coming, right.

So, you think about the national wealth fund that has happened.

You've got the planning regulation, which I think the legislation will come.

These are really, really important milestones in terms of allowing us the opportunity to invest.

So, one thing that has happened is the Solvency UK reforms last year.

That has definitely opened the opportunity for us.

But, you know, there's a lot more that needs to be done.

KAREN TSO: I want to ask you about climate change.

We've had so many interesting conversations in recent weeks in Davos and big European insurance companies as well.

And one of the CEOs said to me, we are moving from risk mitigation to managing risk and the turning point really seemed to be the wildfires in California that there were such large-scale expensive losses where the state got involved and there is a view now that the state does get involved which helps with some of the underwriting costs.

So instead of insurers pulling back, they still insure now and rely on some sort of state underwriting here to mitigate those losses.

Do you sense that there is a sea change now happening in the industry around climate change?

AMANDA BLANC: So, I think certainly you can't deny that climate change is real.

I mean, you saw it here a couple of weeks ago with Storm Eowyn, you saw it in LA, but for us last year, we saw it in Canada.

So, you had effectively 6 cat events in about six weeks.

You know, you had wildfires, you had hailstorms, you had flooding.

And so, what you're seeing I think is more frequent events, but less, less big, less catastrophic.

Not very great language.

But I think you have to be able to price for those, you have to be able to underwrite them.

The state doesn't intervene in, in all instances.

I mean, we do have some here in the UK with FloodRe, but you know, I think insurers have to get better at exposure management, pricing and looking at their books and making sure that they're in the right products in the right areas.

KAREN TSO: So, what triggered the concern for me was that if states are on the hook, then if you're in an area that is prone to climate change and you're a state and you're getting involved in the underwriting business, that it changes the finances of that particular state.

Rather than just being an insurer issue and a reinsurer issue. It brings in a third equation to the mix.

And am I right to be worrying about this?

AMANDA BLANC: I think you're right to be thinking about it because it is it is really important.

If you think about building on floodplains, you know, why would you do that?

So that's where the state can really help is thinking about where properties are being built, where is planning permission being given for properties to be built when there could be an inevitability of that property being flooded.

So, you've got to be clever about how you plan your infrastructure developments, I think in order to make things insurable.

STEVE SEDGWICK: Amanda, that's a great conversation, but I want to just move it on to it's not become trendy to be somebody who touts the Net Zero credentials.

It's not become trendy to talk about how you are driving towards that and how actually you've got run a company with ethics and morality.

There seems to be a theme at the moment where we can ditch all these ideas as well.

I know you and I know how you run your company with ethics and morality as well.

You have a real job not only for Aviva, but actually just demonstrating that these things are still very important.

AMANDA BLANC: Oh absolutely.

I mean if I look at our colleague engagement, it's 91%.

So, you know, our 22,000 colleagues that work at Aviva believe in what we are doing

STEVE SEDGWICK: And believe in actually getting to net zero?

AMANDA BLANC: They believe in getting to net zero, they believe in sustainability, they believe in the opportunities in the UK, you know, they believe in what we are here talking about today.

So, I think it is really important.

You can't deny that climate change is a thing, you know, you just can't.

Canada had its worst year ever for climate change last year.

8.5 billion Canadian dollars in, in, in losses.

You, you know, pretending that that isn't happening and thinking that it's going to go away.

You have to be able to plan and believe that it's the right thing to do.

STEVE SEDGWICK: Your influence is huge, especially as going back to the other point, when you have assets under management, 407 billion, can you direct investment more aggressively away from hydrocarbon players?

AMANDA BLANC: Well, I think we would say we are very big believers in turning brown to green.

So, you know, it's not about directing investment away, it's about encouraging the transition.

So, I think that's really important, but also, we do have climate related transition funds so that investors can invest in those funds should they want to.

STEVE SEDGWICK: There you go.

So, we we're done now by the way of all the serious questions.

The other point that Amanda said to me last time she saw me and I'm going to do this on air.

She said to me, I don't know how Karen puts up with you.

AMANDA BLANC: But you've been very well behaved this morning and I think you've done that because I've put you under that pressure.

STEVE SEDGWICK: I know you're an avid viewer as well. You're a great friend as well.

But, you know, like, really? I’m easy to work with.

AMANDA BLANC: You are a delight.

KAREN TSO: We're going to book you in every day now. You can come in and keep him under control.

AMANDA BLANC: You have my total respect

KAREN TSO: And sympathy, I think is what she means as well.

Dame Amanda Blanc.

Well, good to see you.

I've got to let you go.

Your chaps are waiting in the wings as well.

Thank you very much indeed.

Dame Amanda Blanc, the CEO of Aviva.