Aviva plc First Quarter 2015

Published: 07 May 2015

Aviva plc First Quarter 2015 Interim Management Statement

Mark Wilson, Group Chief Executive Officer, said:

“Aviva’s turnaround is on track and ahead of schedule. It’s been a busy quarter. We have completed the acquisition of Friends Life and at the same time delivered an improvement in our key metrics. Value of new business is up, our general insurance combined operating ratio has improved and our IFRS book value has grown over the quarter. In the face of unpredictable global markets, we continue to improve the Group’s resilience.

“Detailed plans to integrate Friends Life are well underway and whilst this is a challenging and complex project, we are confident of timely progress. We expect 2015 to be a year of continued delivery of our turnaround plan.”

The acquisition of Friends Life was completed on 10 April 2015, after the period to which this trading statement applies. Therefore, unless otherwise stated, all numbers outside of the Friends Life section are for Aviva standalone.

Life insurance

  • Value of new business (VNB) grew 14%1 to £247 million (1Q14: £224 million)
  • UK Life VNB grew 15% to £103 million (1Q14: £89 million), driven by higher equity release and pensions, which more than offset a reduction in annuity VNB
  • Europe2 VNB grew 11%1 to £102 million, flat in reported currency
  • Asia2 VNB grew 16%1 to £36 million (1Q14: £29 million)

General insurance

  • Combined operating ratio (COR) improved to 96.4% (1Q14: 97.7%)
  • UK COR of 98.3% (1Q14: 98.6%), Canada COR of 98.1% (1Q14: 102.7%), Europe COR of 89.8% (1Q14: 92.0%)
  • GI and health net written premiums up 2%1 to £2,037 million, down 2% in reported currency
  • UKGI net written premiums up 1% to £855 million (1Q14: £845 million)

Cash

  • Operating capital generation (OCG) £0.5 billion (1Q14: £0.4 billion)

Balance sheet

  • IFRS net asset value per share increased 2% to 348p (FY14: 340p)
  • Economic capital surplus3 £8.1 billion (FY14: £8.0 billion), coverage ratio 177% (FY14: 178%)
  • The acquisition of Friends Life added c.55p to our NAV per share on closure4
  • Standalone external leverage ratio 40% of tangible capital (FY14: 41%), 28% on an S&P basis (FY14: 28%). Adjusted for Friends Life, estimated leverage ratios are 36% and 27% respectively on closure, well within our target range
  • Holding company liquidity of £1.8 billion at 30 April 2015 including Friends Life

Friends Life

  • Friends Life transaction completed on 10 April 2015 and detailed integration plans are being implemented
  • Positive corporate benefits net flows of £0.2 billion, corporate benefits AUA 7% higher at £23.6 billion (FY14: £22.0 billion)
  • Friends Life VNB declined to £20 million (1Q14: £32 million), driven by the expected decline in retirement income VNB following last year’s Budget announcement

Download the full announcement PDF (254 KB)

  1. On a constant currency basis.
  2. Europe excludes Eurovita and CxG and Asia excludes South Korea.
  3. The economic capital surplus represents an estimated position. The economic capital requirement is based on Aviva’s own internal assessment and capital management policies. The term ‘economic capital’ does not imply capital as required by regulators or other third parties.
  4. Based on Aviva’s pre-acquisition NAV per share at 31 March 2015 of 348p.

Contacts

Investor contacts

Colin Simpson
+44 (0)20 7662 8115

David Elliot
+44 (0)20 7662 8048

Media contacts

Nigel Prideaux
+44 (0)20 7662 0215

Andrew Reid
+44 (0)20 7662 3131

Sarah Swailes
+44 (0)20 7662 6700

Timings

Real time media conference call:
08:30 hrs BST

Analyst conference call:
10:00 hrs BST

Tel: +44(0)20 3427 1903
Conference ID: 8626356

Download the full announcement PDF (254 KB)

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