Aviva plc 2008 Interim Results Announcement
Andrew Moss, group chief executive, commented:
“In the face of economic headwinds Aviva has made real progress in the last six months. Operating profit and dividend are well ahead of last year and we maintain a strong balance sheet despite significant unrealised investment losses affecting our bottom line earnings. We are accelerating our transformational change programme to deliver a unified and more profitable company in line with our 'One Aviva, twice the value' vision. Short term economic uncertainties persist but we remain positive about our prospects.
“We're pleased to have reached an agreement with Clare Spottiswoode, the policyholder advocate, for our inherited estate reattribution in the UK. Policyholders and shareholders will benefit from this ground-breaking deal, that is fair to all parties involved.”
Growth in operating profit and dividend
- EEV operating profit up 12% to £1,719 million
- IFRS operating profit up 7% to £1,233 million
- Dividend up 10% to 13.09p, reflecting confidence in delivery of stated targets and future prospects
Financial strength in an uncertain economic environment
- Net asset value per share of 702 pence
- Strong balance sheet and sound capital position despite unrealised investment losses leading to overall loss after tax
Resilient business flows driven by composite model and geographic spread
- Life and pensions sales up 11% to £17,283 million at increased margin
- General insurance result ahead of 'meet or beat' combined operating ratio target at 97%
- Difficult conditions in global markets reduce asset management result; plans on track for Aviva Investors launch
Accelerating transformational change of existing business for the benefit of customers and shareholders
- Reaffirmed commitment to growth and efficiency targets
- Increase in cost savings target to £500 million (from £350 million)
Reattribution offer agreed with policyholder advocate#
- £1 billion offer to eligible policyholders funded from existing shareholder resources: £400 minimum and £1,000 average cash payment to customers
- With special distribution, around 70% of value of inherited estate released to policyholders, totalling £3.1 billion
- Internal rate of return on reattribution of 11.5%~, creating a one-off EV profit of £225 million and a one-off IFRS profit of £390 million for shareholders and underpinning confidence in future dividend stream
Enquiries:
| Andrew Moss | Group chief executive | +44 (0)20 7662 2679 |
|---|---|---|
| Philip Scott | Group finance director | +44 (0)20 7662 2264 |
Analysts: | ||
| Charles Barrows | Investor relations director | +44 (0)20 7662 8115 |
| Jessie Burrows | Head of investor relations | +44 (0)20 7662 2111 |
| Susie Yeoh | Investor relations, senior manager | +44 (0)20 7662 2117 |
Media: | ||
| Hayley Stimpson | Director of external affairs | +44 (0)20 7662 7544 |
| Sue Winston | Head of group media relations | +44 (0)20 7662 8221 |
| Danielle Anthony | Group media relations, senior manager | +44 (0)20 7662 9511 |
| Vanessa Rhodes | Group media relations, senior manager | +44 (0)20 7662 2482 |
| James Murgatroyd/Ed Simpkins | Finsbury | +44 (0)20 7251 3801 |