Excellent first half – consistently delivering
Double digit growth in operating profit, cash remittances and capital generation
Confident outlook for 2024 and beyond
| Operating profit1 | Solvency II OFG | Undiscounted COR | Solvency II cover ratio3 | 2024 interim dividend |
|---|---|---|---|---|
| £875m | £758m | 95.4% | 205% | 11.9p |
| +14% | +10% | +0.6pp | (2)pp | +7% |
| HY232: £765m | HY232: £686m | HY23: 94.8% | FY23: 207% | HY23: 11.1p |
Amanda Blanc, Group Chief Executive Officer, said:
“Sales are up. Operating profit is up. The dividend is up. Our plan to deliver more for customers and shareholders is working really well.
“We have achieved another six months of excellent trading. We have generated growth right across Aviva, thanks to our leading positions in attractive markets such as workplace pensions and general insurance in the UK and Canada.
“Aviva continues to benefit significantly from the balanced and diversified business we have built and lead. We are the only UK insurer which can look after customers’ entire insurance, wealth and retirement needs, and this is paying off. We have 270,000 more customers this year and 4.9 million UK customers have more than one policy with us.
“We are the number one provider of workplace pensions and are planning to launch a new venture and growth capital strategy. This will open up new investment opportunities for our pension customers and could help unlock billions of pounds of investment into unlisted growth companies.
“We remain very positive about Aviva’s prospects. Trading conditions across the UK, Ireland and Canada, are excellent. And the UK market, our largest, is highly attractive and growing. We see many reasons to invest here, including greater economic stability and political certainty. This encouraging backdrop - and Aviva's continued strong financial performance - means we are increasingly confident we can deliver even more for our customers and shareholders.”
Strong first half results with continued profitable growth momentum
- Group operating profit up 14% to £875m (HY232: £765m).
- Solvency II operating own funds generation (Solvency II OFG) up 10% to £758m (HY232: £686m). Underlying Solvency II OFG up 27% to £768m (HY23: £605m).
- Solvency II operating capital generation (Solvency II OCG) up 17% to £722m (HY232: £618m). Underlying Solvency II OCG up 42% to £739m (HY23: £522m).
- Solvency II return on equity 12.4% (HY232: 11.5%).
- Cash remittances up 16% to £959m (HY23: £825m).
- Insurance, Wealth & Retirement (IWR) sales up 12% to £19.7bn (HY23: £17.6bn).
- General Insurance premiums4 up 15%5 to £6,005m (HY23: £5,274m). Undiscounted COR of 95.4% (HY23: 94.8%) and discounted COR of 91.5% (HY23: 91.3%).
- IFRS profit for the period6 of £654m (HY232: £415m).
Capital position is strong and resilient
- Solvency II shareholder cover ratio of 205% (FY23: 207%) and centre liquidity (Jul 24) of £1.5bn (Feb 24: £1.9bn).
- Solvency II debt leverage ratio of 31.1% (FY23: 30.7%) or 28.8% pro forma for the Tier 2 notes redeemed on 3 July 2024
- Interim dividend per share up 7% to 11.9p (HY23: 11.1p)
- £300m share buyback executed in the first half, and we anticipate further regular and sustainable returns of capital in the future.
Continued capital-light growth momentum
- UK&I General Insurance premiums up 18% to £3,809m (HY23: £3,219m) and undiscounted COR of 95.8% (HY23: 96.3%). UK personal lines premiums grew by 30% driven by strong pricing discipline in the inflationary environment and new propositions. UK commercial lines premiums grew 10% due to pricing actions and new business growth.
- Canada General Insurance premiums up 10% to £2,196m (HY23: £2,055m) and undiscounted COR of 94.7% (HY23: 92.8%). We saw excellent growth of 14% in personal lines and 6% in commercial lines driven by pricing actions and strong new business growth.
- Protection sales4 up 49% following completion of the AIG UK protection (‘AIG’) acquisition in April and Health in-force premiums7 up 10%.
- Wealth net flows of £5.0bn (HY23: £4.3bn) up 16%, or 6%8 of opening Assets Under Management (AUM) as Platform flows see significant improvement. AUM grew to £186bn (FY23: £170bn).
- Retirement sales of £3,036m (HY23: £3,223m) were lower, driven by contraction of the Equity Release market and BPA sales of £2.3bn (HY23: £2.4bn). As of today, volumes for completed BPA schemes have risen to £4.1bn. VNB was up 41% to £105m reflecting improved margins of 3.4% (HY23: 2.3%).
- Aviva Investors is a core enabler of growth for the Group. In the first half it originated £1.4bn of real assets for our annuities business, and c.70% of Workplace net flows went into Aviva Investors funds. External net flows remained positive at £0.3bn (HY23: £0.2bn).
Group financial performance
| General Insurance premiums | Solvency II OCG | IFRS profit for the period |
|---|---|---|
| £6,005m | £722m | £654m |
| +15% | +17% | +58% |
| HY23: £5,274m | HY232: £618m | HY232: £415m |
Cash and liquidity
| Cash remittances | Centre liquidity |
|---|---|
| £959m | £1,528m |
| +16% | (19)% |
| HY23: £825m | Feb 24: £1,891m |
Confident outlook
Our positive momentum continued in the first half of 2024 with a strong set of results. We remain confident in meeting the Group targets outlined at our full year 2023 results presentation:
- Operating profit: £2bn by 2026.
- Solvency II OFG: £1.8bn by 2026.
- Cash remittances: > £5.8bn cumulative 2024-26.
Today, we’re already majority capital-light, and we’re continuing to accelerate by investing in the business and through targeted M&A. Delivering on our plans will see us close to 70% capital-light by 2026 on an operating profit basis.
In General Insurance we remain focused on pricing appropriately. Over the second half of the year, we expect the underlying Group COR to continue to benefit from the pricing actions taken in 2023 and so far in 2024.
In our Health business we anticipate further growth in the second half, while Protection growth is expected to moderate. In Wealth we expect our strong growth momentum to continue.
We anticipate completing our three year ambition of £15-20bn of BPA volumes by writing £7-8bn this year.
We remain committed to delivering for our shareholders. We paid a total dividend of £906m for 2023 and our dividend guidance for mid-single digit growth in the cash cost of the dividend remains. Our intentions for further regular and sustainable returns of capital remain unchanged.
Download our half year results 2024 announcement PDF (10.7MB)
Download our half year results 2024 presentation PDF (2.8MB)
Watch our 2024 half year update for investors and analysts
Watch our Group CEO, Amanda Blanc's half year results 2024 video
Transcript for video Amanda Blanc's 2024 half year results video
Voiceover: For over 326 years, we’ve been supporting our customers with the most precious aspects of their lives.
More than 19.5 million people choose us to meet their insurance, wealth and retirement needs.
That’s because they know we’re with them today, for a better tomorrow.
Our strong results reflect the hard work of our 23,000 colleagues
Today we’ve announced an excellent set of half year results
£875m operating profit
Our capital position is strong at 205%
Premiums are up 15% in General Insurance
Sales are up 12% in IWR
And net flows are up 16% in Wealth.
These numbers demonstrate our accelerating momentum.
Helena: Welcome, Amanda. Thank you so much for inviting me here today to talk about our performance. So we're halfway through the financial year. So how are we performing?
Amanda: Well hello and Helena, it’s very, very nice to see you. Thank you very much for doing this. We really, really appreciate it. It's hard to believe, isn't it, that we are actually halfway through the year already, but in terms of how Aviva is performing, I think what today's numbers show is that we are continuing to demonstrate Aviva's accelerating momentum.
Amanda: We've got fantastic opportunities right across our markets, and we're executing on our strategy. And, you know, that strategy has been the same now for the last four years. Some of the key areas - we're growing right across our business and more importantly, we are accelerating in those capital light areas. We're more profitable. Operating profit and OFG are both up double digits.
Amanda: And yet, as I always say to the team, there's a lot more where that came from.
Helena: I love it. So you were mentioning there about growing the business and those capital light areas. Can you tell me a wee bit more about that?
Amanda: Yeah, of course. So hitting our plans would see us get close to 70% of our business in capital-light areas by 2026. And how we propose to do that is a combination of investing in those organic growth areas, but also targeted M&A. So if I break that down into the different areas. In Wealth, Doug, in the team have been cementing our number one position as the UK wealth player with 186 billion pounds of assets under management.
Amanda: And then Mark and the team in Aviva Investors are capturing 70% of the workplace flows, which I think demonstrates the real power of our connected wealth proposition. In Health premiums are up, and in Protection the integration of the AIG business puts us as the clear number one in the market. In General Insurance Jason and the team are delivering double digit growth across the business, which you will, of course, know very well.
Amanda: And particularly in the retail growth, which is, you know, I think exceptional. And we've expanded on our position in Commercial Lines. And over in Canada, Tracy and the team are growing through the opportunities to our RBC partnership, but also wins in Commercial Lines.
Helena: Wow. Loads and loads of examples there. So the recent acquisition of the Lloyd’s business, Probitas. Will that have a role to play here?
Amanda: Yeah I mean Probitas does play a role. The last time we stood up at results was the week that we had announced the Probitas deal. And what it does is it helps us to accelerate growth in our Global Corporate and Specialty business, which of course, you would be, super interested in. And what it means is that we're better positioned to serve our multinational clients. With access to Lloyd's we’ve more than doubled our distribution opportunity and it allows us to be a dual platform player. And of course, having strong presence either side of the Atlantic also makes a really big difference.
Helena: Absolutely. Very exciting times. So our focus has been on the customer and our results are really showing that. Do you have anything more to share with regards to what's happening in the customer space?
Amanda: Absolutely. In the UK, we're already operating at a similar scale to the leading banks and we're growing. So we have over 4.9 million individual customers with two or more Aviva policies. And more than 40% of our new sales are to existing individual customers. And we're building our loyalty by focusing on delivering the right outcomes for our customers and improving experience.
Amanda: So, for example, we're providing affordable insurance with the QuoteMeHappy Essentials range in the UK. We're helping people offset emissions with Aviva Zero. We've sold over 800,000 policies since we launched that two years ago. And we've recently refreshed our MyAviva app with seven million users. That's obviously very important to us.
Helena: Do you have anything more for people to take away today?
Amanda: Yes, I do. So we're often asked about how we've managed to deliver such consistent results like today. And of course, the answer is our fantastic people, the high performance culture and our ability to execute. So what I want to do is take a moment to just thank everyone at Aviva, not just for the performance, but also for their belief in what we are trying to do and their relentless focus on our customers.
Amanda: It's our 23,000 colleagues that help to keep us on track every single day.
Helena: Thanks so much for your time today, Amanda. Really appreciate the opportunity to ask you those questions.
Amanda: And thank you very much indeed.
Voiceover: Our strategy is clear. And it’s working.
We are delivering for our customers and shareholders, with Aviva colleagues at the very heart of our success.
We have so much to be proud of, thank you.
Aviva: With you today, for a better tomorrow.
Footnotes
1 Reference to operating profit represents Group adjusted operating profit which is a non-GAAP APM and is not bound by the requirements of IFRS. Further details of this measure are included in the 'Other information' section.
2 Comparative amounts for the period ended 30 June 2023 have been restated for the historic with-profits accounting adjustment disclosed in the 2023 Annual Report and Accounts (see the ‘Other Information’ section for further details).
3 Solvency II shareholder cover ratio is the estimated Solvency II shareholder cover ratio at 30 June 2024.
4 Sales for Insurance, Wealth & Retirement (IWR) and for Retirement (Annuities and Equity Release) refers to Present Value of New Business Premiums (PVNBP). Sales for Insurance (Protection and Health) refers to Annual Premium Equivalent (APE). Premiums for General insurance refer to gross written premiums (GWP). The first instance of each reference has been footnoted. However, this footnote applies to all such references in this announcement. PVNBP, APE and GWP are Alternative Performance Measures (APMs) and further information can be found in the 'Other information' section.
5 All Group GWP and Canada General Insurance movements are quoted in constant currency.
6 IFRS profit for the period represents IFRS profit after tax.
7 Health in-force premiums represents the total premiums attributable to Health policies in-force as at the reporting date, and is used to measure the growth of the Health business.
8 Net flows annualised as a percentage of opening assets under management.
Enquiries
Investor contacts:
Rupert Taylor Rea
+44(0) 7385 494 440
Joel von Sternberg
+44(0) 7384 231 238
Michael O'Hara
+44(0) 7387 234 388
Media contacts:
Andrew Reid
+44 (0)7800 694 276
Sarah Swailes
+44 (0)7800 694 859
Marion Fischer
+44 (0)7800 693 219
Timings
Presentation slides: 0700 hrs BST
Real time media conference call: 0730 hrs BST
Analyst conference call/audiocast: 0830 hrs BST
Notes to editors
- All figures have been translated at average exchange rates applying for the period, with the exception of the capital position, which is translated at the closing rates on 30 June 2024. The average rates employed in this announcement are 1 euro = £0.85 (2023: 1 euro =£0.87) and CAD$1 = £0.58 (2023: CAD$1 = £0.60). Where percentage movements are quoted on a constant currency basis, this is calculated by applying year to date average exchange rates to prior period.
- Growth rates in this announcement have been provided in sterling terms unless stated otherwise.
- All percentages, including currency movements, are calculated on unrounded numbers so minor rounding differences may exist.
- Throughout this report we use a range of financial metrics to measure our performance and financial strength. These metrics include Alternative Performance Measures (APMs), which are non-GAAP measures that are not bound by the requirements of IFRS and Solvency II. A complete list and further guidance in respect of the APMs used by the Group can be found in the 'Other information' section.
- We are the UK's leading diversified insurer and we operate in the UK, Ireland and Canada. We also have international investments in India and China.
- We help our 19.5 million customers make the most out of life, plan for the future, and have the confidence that if things go wrong we’ll be there to put it right.
- We have been taking care of people for more than 325 years, in line with our purpose of being ‘with you today, for a better tomorrow’. In 2023, we paid £25.6 billion in claims and benefits to our customers.
- In 2021, we announced our ambition to become Net Zero by 2040, the first major insurance company in the world to do so. We are aiming to have Net Zero carbon emissions from Aviva’s operations and supply chain by 2030. While we are working towards our sustainability ambitions, we recognise that while we have control over Aviva’s operations and influence on our supply chain, when it comes to decarbonising the economy in which we operate and invest, Aviva is one part of a far larger global ecosystem. There are also limits to our ability to influence other organisations and governments. Nevertheless, we remain focused on the task and are committed to playing our part in the collective effort to enable the global transition. Find out more about our climate goals at www.aviva.com/climate-goals and our sustainability ambition and action at www.aviva.com/sustainability.
- Aviva is a Living Wage, Living Pension and Living Hours employer and provides market-leading benefits for our people, including flexible working, paid carers leave and equal parental leave. Find out more at www.aviva.com/about-us/our-people
- As at 30 June 2024, total Group assets under management at Aviva Group were £398 billion and our estimated Solvency II shareholder capital surplus was £8.2 billion. Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
- For more details on what we do, our business and how we help our customers, visit www.aviva.com/about-us
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