Aviva plc 2016 Preliminary Results Announcement

Published: 09 Mar 2017

Aviva plc 2016 Preliminary Results Announcement.

Mark Wilson, Group Chief Executive Officer, said:

"Aviva’s results are simple and clear cut: more operating profit, more capital,more cash, more dividend.

And there is more to come. 

Aviva’s financial position has been transformed and a distinctly stronger balance sheet and excess capital give Aviva more options. We are now actively planning a capital return to our shareholders and debt reduction in 2017 and will invest further to grow our businesses.

The numbers speak for themselves. Fund management delivered a breakout year with strong positive net flows and operating profit up 30%. General insurance is growing, with operating profit up 17%1, and in UK Digital we have doubled online registrations to five million. We are becoming a digital disruptor for the benefit of our customers.

In 2016 we made strong progress on our commitments of cash flow and growth. Reflecting these results, we are increasing the total dividend per share by 12% to 23.3p."

Please click here to see a short film with Mark Wilson talking about today’s results

Profit

  • Operating profit2,3 up 12% to £3,010 million (2015: £2,688 million4)
  • Operating EPS2,3 up 3% to 51.1p (2015: 49.7p4)
  • Operating profit and operating EPS exclude the impact of the change in the Ogden discount rate in UK general insurance, which has been classified as an exceptional item
  • IFRS profit after tax down 22% to £859 million (2015: £1,097 million4) including the £380 million after-tax charge due to the reduction in the Ogden discount rate

Capital

  • Solvency II capital surplus5 £11.3 billion (2015: £9.7 billion)
  • Solvency II coverage ratio5,6 of 189% (2015: 180%)
  • Solvency II operating capital generation £3.5 billion
  • Net asset value up 6% to 414p per share (2015: 390p4)
  • Holding company liquidity7 £1.8 billion (2015: £1.3 billion)

Cash

  • 2016 total dividend up 12% to 23.3p (2015: 20.8p)
  • Dividend pay-out ratio 46% (2015: 42%4), progress towards 50% target
  • Cash remittances up 20% to £1,805 million (2015: £1,507 million)

Growth

  • General insurance net written premiums3 up 15% to £8,211 million (2015: £7,171 million)
  • Life insurance value of new business up 13% to £1,352 million (2015: £1,192 million)
  • Fund management operating profit up 30% to £138 million (2015: £106 million)
  • AIMS AUM trebled to £9 billion (2015: £3 billion)
  • Total group assets under management up to £450 billion

Combined ratio

  • General insurance combined operating ratio 95.2% (2015: 94.6%) excluding the Ogden discount rate impact. Including the Ogden impact, the combined operating ratio was 101.1%.

Download the full announcement PDF (1.95MB)

  1. 2016 comparatives have been rebased for the reduction in the internal loan.
  2. Operating profit is a non-GAAP measure used by management and excludes the impact of the exceptional Ogden charge. Refer to ‘Financial supplement’ for the reconciliation of Group operating profit to profit after tax - IFRS basis and refer to note B7 - Earnings per share for a reconciliation of operating earnings per share to basic earnings per share.
  3. 2016 and 2015 exclude the impact from an outward quota share reinsurance agreement written in 2015 and completed in 2016 in Aviva Insurance Limited (AIL). See note A10 for further details.
  4. Following a correction to accounting and modelling for annual management charge rebates in UK Life, prior year comparatives have been restated. This has led to an increase in operating profit and profit before tax of £23 million for full year 2015 and an increase in opening retained earnings for 2015 of £20 million with an increase in equity at 31 December 2015 of £38 million. See note B2 for further details.
  5. The estimated Solvency II position includes an estimated adverse impact of a notional reset of the transitional measure on technical provisions (‘TMTP’) to reflect interest rates at 31 December 2016. Removing this notional reset of TMTP would increase the estimated Solvency II surplus by £0.4 billion. Amortisation of TMTP since 1 January 2016 is also reflected. Also included are the proforma impacts of the disposal of Aviva’s 50% shareholding in Antarius to Sogecap expected to complete 1 April 2017 (£0.2 billion increase to surplus) and a future change to UK tax rules restricting the tax relief that can be claimed in respect of tax losses (£0.4 billion decrease to surplus).
  6. The estimated Solvency II ratio represents the shareholder view. This excludes the contribution to Group Solvency Capital Requirement (SCR) and Group Own Funds of fully ring fenced with-profits funds £2.9 billion (2015: £2.7 billion) and staff pension schemes in surplus £1.1 billion (2015: £0.7 billion) - these exclusions have no impact on Solvency II surplus.
  7. As at the end of February in 2017 and 2016 respectively.

Investor contacts

Chris Esson
+44 (0)20 7662 8115

Diane Michelberger
+44 (0)20 7662 0911

Media contacts

Nigel Prideaux
+44 (0)20 7662 0215

Andrew Reid
+44 (0)20 7662 3131

Sarah Swailes
+44 (0)20 7662 6700

Timings

Presentation slides: 07:00 hrs GMT
www.aviva.com

Real time media conference call: 07:45 hrs GMT

Analyst presentation: 09:00 hrs GMT

Live webcast: 09:00 hrs GMT
http://www.avivawebcast.com/prelim2016/

Download the full announcement PDF (1.95MB)

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