Strong growth in profits and capital generation

Andrew Moss, group chief executive, commented:

“This was a good half year for Aviva. We achieved a 21% increase in operating profits, grew sales for the third consecutive quarter and improved the group's margin.

“At a time when predictability of cashflows and capital strength are crucial, Aviva's capital generation stands out, and allows us to invest in the profitable growth of the business and increase the dividend.

“Our first half earnings are tangible evidence of the progress we've made in the last few years - but there's more to do. We will continue to focus on customers and on the disciplined allocation of capital to ensure we grow Aviva profitably. While we remain alert to the macroeconomic environment and risks in financial markets, Aviva has excellent franchises in proven growth markets and we are confident about the future.”

Strong growth in profits…

• IFRS operating profit up 21% to £1,270 million (HY 2009: £1,049 million)
• General insurance COR of 97%, beating 98% 'meet or beat' target
• Interim dividend per share up 6% to 9.5 pence

…and powerful capital generation…

• £0.9 billion net capital generated in HY 2010 (HY 2009: £0.5 billion) and full year guidance increased from £1.3 billion to £1.5 billion
• Improved capital efficiency: sales increased and capital invested in new business reduced to £0.5 billion (HY 2009: £0.9 billion)

…in the world’s largest life and pensions markets

• Long-term savings sales up 4% on HY 2009 to over £20 billion
• Good profit growth in the UK and Europe driven by a leading position in the world’s largest life and pensions markets, offering the greatest absolute growth over the next five years
• Major new UK bancassurance partnership with Santander announced this week. In Europe bancassurance sales up by 20%

Performance demonstrates building momentum

• Continued focus on profitable growth: group IRR on new business increased to 12% (HY 2009: 9.5%)
• Focus on cost reduction has driven costs down a further 4%
• Significant progress in the US: IRRs improved to 14%

Contacts

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