Aviva plc 2003 Interim Results Announcement
INTERIM RESULTS
6 MONTHS ENDED 30 JUNE 2003
Richard Harvey, Group Chief Executive, commented:
“These good results show that we are delivering against our targets of maintaining margins, reducing costs and improving return on capital in a challenging environment. In the first half the Group has improved its return on capital to 11.0%, grown bancassurance sales by 56%, maintained margins by seeking cost efficiencies and produced an outstanding general insurance performance. Our business model of geographically spread long-term savings operations and a cash generating general insurance business gives us strength against the current backdrop”.
| * | From continuing operations, including life achieved operating profit and stated before tax, amortisation of goodwill and exceptional items. |
| ** | From continuing operations, before tax, amortisation of goodwill, amortisation of acquired additional value of in-force long-term business and exceptional items. |
| † | From continuing operations. |
| # | Calculated in accordance with FSA regulations, including implicit items but excluding the impact of the waivers granted by the FSA earlier in the year. |
| All growth rates quoted are at constant rates of exchange. |
LIFE OPERATIONS: EXCELLENT GROWTH IN CONTINENTAL EUROPE WITH STABILISED UK LIFE PERFORMANCE
- Strong worldwide bancassurance life and pensions sales up 56% to £299 million on an APE basis (2002: £179 million) representing a quarter of our new business with a margin of 35.5%
- Worldwide new business life and pension sales of £1.2 billion on an APE basis (2002: £1.2 billion) with margins maintained at 24.5% (full year 2002: 24.4%)
- UK margins maintained at 22.0% in the second quarter
- Worldwide new business sales at £7.5 billion (2002: £7.3 billion) with majority coming from outside the UK
EXCELLENT GENERAL INSURANCE PERFORMANCE
- Worldwide combined operating ratio† of 101% (2002: 101%) with strong performances in the UK, Ireland and the Netherlands
- Improved expense ratio† of 10.9% (2002: 11.1%)
IMPROVING FINANCIAL STRENGTH AND COST EFFICIENCY
- Operating profit* of £828 million (2002: profit of £955 million) which resulted in an improved profit before tax on an achieved profit basis of £850 million (2002: loss of £462 million). On a modified statutory basis, operating profit** was £638 million (2002: £733 million)
- Improved return on capital of 11.0% over first half of 2003 in comparison to the year end of 9.7%
- Net cost savings of £30 million achieved in first six months after incremental development spend of £10 million
- Equity shareholders’ funds of £10.2 billion (31 December 2002: £9.5 billion) with net asset value up at 468 pence per share (31 December 2002: 433 pence per share)
- Orphan estate of £4.5 billion (31 December 2002: £4.3 billion) and improved free asset ratio# of UK life with profit funds 14.0% at 30 June 2003 (31 December 2002: 11.8%)
- Interim dividend increased by 2.9% to 9.0 pence net per share
Enquiries:
| Richard Harvey | Group Chief Executive | +44 (0)20 7662 2286 |
| Mike Biggs | Group Finance Director | +44 (0)20 7662 2031 |
| Analysts: | ||
| Steve Riley | Investor Relations Director | +44 (0)20 7662 8115 |
| James Matthews | Head of Investor Relations | +44 (0)20 7662 2137 |
| Media: | ||
| Hayley Stimpson | Director of External Affairs | +44 (0)20 7662 7544 |
| Sue Winston | Head of Group Media Relations | +44 (0)20 7662 8221 |
| Alex Child-Villiers | Financial Dynamics | +44 (0)20 7269 7107 |