Aviva plc 2013 Preliminary Results Announcement

Mark Wilson, Group Chief Executive Officer, said:

“The turnaround at Aviva is intensifying. We have focused the business on ‘cash flow plus growth’ and the benefits are starting to be reflected in our performance. Cash flows to the Group are up 40%, operating expenses are down 7%, operating profit is up 6% and Value of New Business is up 13%. After a £2.9 billion loss after tax last year, Aviva has delivered a £2.2 billion profit.

“Following our exit from a number of low margin, underperforming or non-strategic businesses, Aviva is simpler, more focused and better managed. We have significantly improved our capital surplus, increased our liquidity and have a stronger leadership team.

“Although we have made progress in 2013, I want to guard against complacency. Aviva still has issues to address. Have we made progress? Yes, some. Is it a little faster than anticipated? Probably. Have we unlocked the full potential at Aviva? Not yet.”

Cash flow

• Cash remittances¹ to Group up 40% at £1,269 million² (FY12: £904 million)
• Operating capital generation¹ £1,772 million (FY12: £1,859 million)
• Remittance ratio 72%^1,2 (FY12: 49%)
• Final dividend per share 9.4p (FY12: 9p). Full year dividend per share 15p.

Profit

• Operating profit¹ 6% higher at £2,049 million (FY12: £1,926 million)
• IFRS profit after tax £2,151 million (FY12: loss after tax £2,934 million)

Expenses

• Operating expenses £3,006 million^1,3, down 7%
• £360 million cost savings already achieved
• 2013 cost savings ahead of plan

Value of new business

• Value of new business⁵ up 13% at £835 million (FY12: £738 million)
• Poland, Turkey and Asia⁵ contributed 21% of Group VNB (FY12: 16%) and collectively grew 49%

Combined operating ratio

• Combined operating ratio 97.3% (FY12: 97.0%)
• 2014 flood losses of £60 million in the UK in January and February, in line with long term average

Balance sheet

• Intercompany loan reduced by £1.7 billion to £4.1 billion at end of February 2014 (FY12: £5.8 billion)
• Agreed plan to reduce inter-company loan to £2.2 billion by end of 2015, utilising £450 million of existing cash resources and £1.45 billion of other actions
• Liquidity of £1.6 billion at end of February 2014
• Economic capital surplus⁴ £8.3 billion (FY12: £7.1 billion⁴), coverage ratio 182%
• IFRS net asset value per share 270p (FY12: 278p)
• MCEV net asset value per share 445p (FY12: 422p)