Strong progress continues with a good start to 2011

 

 

Andrew Moss, group chief executive, commented:

“We have made a good start to the year. Our general insurance performance is a real highlight; sales are up strongly and profitability is good. Life sales are down on 2010, primarily because we have driven new business returns higher by changing our product mix to focus on more profitable business.

“We’re also committed to making further strategic progress and have reduced our holding in Delta Lloyd, freeing up capital to earn better returns elsewhere.

“By making the most of our powerful combination of life and general insurance and by ensuring we put our customers at the heart of our business, I’m confident that Aviva will continue to thrive in 2011.”

General insurance: strong premium growth and improved profitability

• Strong performance driven by combination of pricing actions, improved efficiency and improving market conditions
• Net written premiums of £2.7 billion: 14% increase on 4Q10 and 9% increase on 1Q10
• Group combined operating ratio strong at 97% (1Q10: 102%)
• UK general insurance sales up for fifth consecutive quarter - 20% increase to over £1 billion (1Q10: £0.9 billion)
• Brand strategy working well - 580,000 additional UK motor customers since the start of 2010
• Appointed Preferred Strategic Partner to HSBC across Europe and extended the existing general insurance agreement in the UK until 2016

Life insurance: increasing returns from a change in business mix

• Improved profitability - new business internal rate of return ex Delta Lloyd increases to 13.7% (1Q10: 12.3%)
• Long-term savings sales of £8.8 billion: level with 4Q10 and 14% decrease on 1Q10 as less profitable business is reduced
• Management actions to improve profitability and capital efficiency drive lower sales volumes in Italy and US

Good strategic progress

• Continued focus on priority markets where we have strength and scale
• Reduced shareholding in Delta Lloyd from 58% to 43%, generating gross cash proceeds of £381 million
• On track to meet the group’s near-term financial targets

Contacts

Media

There will be a conference call today for real-time media at 0745 hrs (BST). The conference call will be hosted by Andrew Moss, group chief executive.

The Aviva media centre at www.aviva.com/media includes images, company information and news release archive. Photographs are available on the Aviva media centre at www.aviva.com/media.

Analysts

There will be a conference call for analysts and investors at 0930 hrs (BST) on +44 (0) 207 162 0125 (access code 895124), which will be hosted by Andrew Moss. There will be a replay facility on +44 (0) 20 7031 4064 (access code 895124) until 31 May 2011.

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