Aviva reports strong 2010 results

Aviva group has announced strong 2010 results, with 26% in operating profits and 5% growth in Aviva UK General Insurance business, which is headquartered in Norwich.

Strong performance

IFRS operating profit up 26% to £2.55 billion (FY 2009: £2.02 billion)
Profit before tax up 35% to £2.44 billion (FY 2009: £1.81 billion)
Increased net operational capital generation by 70% to £1.7 billion¹ (FY 2009: £1.0 billion)
IFRS Net Asset Value per share up by 21% to 454p (FY 2009: 374p) EEV equivalent NAV per share 621p.
IFRS return on equity 14.8% (FY 2009: 10.9%)
Total dividend per share up 6% to 25.5 pence

Profitable growth in both life and general insurance

Improved life new business IRR to 12.5% and payback to 8 years (FY 2009: 10.0% and 14 years) and long term savings sales up 4% to £37.4 billion (FY 2009: £35.9 billion)
General insurance COR of 96.8% (FY 2009: 99%) and general insurance and health net written premiums up 6% to £9.7 billion

Positive outlook: good platform for continued growth

Focusing on markets where we have strength and scale: UK and Europe is the largest savings market in the world with greatest absolute growth in next five years
Improved profitability and focus on robust capital generation
Stronger balance sheet - pension deficit reduced to zero from £1.7 billion² (31.12.09); IFRS shareholder equity now exceeds pre-financial crisis levels, increasing during the year by £2.5 billion to £13.0 billion
Financial strength recognised in recent positive rating action by S&P and Fitch

Andrew Moss, Group Chief Executive, commented:

Andrew Moss, Group Chief Executive “We've gone from strength to strength in 2010. In a tough external environment we've outperformed. Operating profits are up 26% and we are able to reinvest in the business and pay a healthy and growing dividend.

“Over the last few years, we've grown the business, significantly reduced costs and strengthened the balance sheet. As a result, we've created a good platform for the next phase of growth.

“We have a clear strategy and we are meeting our customers' needs. By focusing on what we do best in the markets where we have strength and scale, we will continue to prosper in 2011.”

In his review he stated:

Our general insurance performance is a very important highlight of 2010. Over the last couple of years, we took tough decisions to move away from unprofitable business, particularly in the UK. This means that, from a sound footing, we are now growing in a market which shows some signs of improvement and total general insurance and health net written premiums increased by 6% to £9,699 million.

Our offering is proving very successful. In the UK General Insurance business, net written premiums were 5% higher at £4,046 million in 2010 and we delivered four consecutive quarters of sales growth. In Aviva Europe the COR was 103%, and although some of this was due to poor weather this is an area for further improvement in 2011. In Canada – our second largest general insurance business – our decision to exit unprofitable business contributed to a 54% increase in operating profit to £222 million on slightly lower sales, down 3% to £1,958 million on a constant currency basis.

Across the general insurance business we achieved a COR of 96.8%, better than our 2011 target of 97%.

The strength of our bancassurance performance was particularly pleasing. Our combination of life and general insurance and our excellent products and services in both areas make us an attractive business partner and during 2010 we announced new arrangements with Santander and Royal Bank of Scotland. We have over 100 bank partnerships and long-term savings sales in this area grew by 10% in the year.

To download the full announcement visit Aviva.com by clicking here

¹ Gross of Delta Lloyd longevity assumption change.

² IAS19 basis.

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