Aviva plc: Preliminary results for the year ended 31 December 2007

Andrew Moss, group chief executive, commented:
“2007 brought change at Aviva as we sharpened our focus on growth and efficiency in line with our ‘One Aviva, twice the value’ vision. The advantage of our diverse business model is demonstrated by robust financial results which show our fast-growing life business offsetting the exceptional losses caused by the worst UK floods for 60 years.

“In volatile investment markets our conservative approach to investment risk has served us well. In the second half of 2007 we reduced shareholder exposure to equity market volatility by selling £3.4 billion of equities. Net asset value per share is up 13%.

“Although the external environment is uncertain, customers need the products we provide and our markets remain fundamentally attractive. We have a strong balance sheet and a clear strategy and we believe now is the time to set ourselves a further target in line with our vision of 'One Aviva, twice the value'. In addition to our existing growth and efficiency targets, we aim to double IFRS total earnings per share by 2012, at the latest, and drive further dividend growth.”

 

• Excellent long-term savings result offsets general insurance adverse weather impact
  • EEV operating profit up 1% to £3,286m (2006: £3,251m)
• Lower IFRS return reflects impact of adverse weather and reduced investment gains following higher than expected gains in 2006
  • IFRS operating profit down 15% to £2,228m (2006: £2,609m); IFRS earnings per share 49.2p (2006: 87.5p)
• Strong long-term savings sales and profits across all regions
  • Life EEV operating profit up 35% to £2,753m (2006: £2,033m)
  • Long-term savings new business sales up 25% to £38.6bn; increased margin of 3.7% (2006: 3.5%)
• General insurance profits lower in a challenging year
  • GeneraI insurance and health operating profit down 39% to £1,033m (2006: £1,686m)
  • Combined operating ratio (COR) of 100% (2006: 94%); 95% before impact of £475m UK exceptional weather losses
• Healthy balance sheet
  • Net asset value per share of 772p, up 13%
  • Shareholder exposure to equity market volatility reduced by £3.4 billion sale of equities in 2007
  • Conservative balance sheet not materially affected by global credit concerns
• Dividend increase of 10% to 33.00p
  • Demonstrates confidence in delivery against stated targets
• Delivering on ‘One Aviva, twice the value’ vision
  • New group target to double IFRS total earnings per share by 2012 at the latest, to drive further dividend growth
  • New globally integrated asset management business, ‘Aviva Investors’, to transform investment model and increase third party business, notably through cross-border sales