Aviva plc 2020 preliminary results announcement

A refocused Aviva, transforming at pace

Resilient financial performance

  • Operating profit1,‡# of £3,161m (2019: £3,184m) and IFRS profit for the year of £2,910m (2019: £2,663m)
  • Core business unit operating profit1,‡# of £2,492m (2019: £2,558m)
  • Cash remittances‡# of £1,500m (2019: £2,597m)
  • Core business cash remittances‡# of £1,359m (2019: £1,409m excluding UK Life special remittance)

Sales of Aviva France and Aviva Italy in 2021 – major progress in our strategic transformation

  • On completion will significantly strengthen capital and liquidity: excess capital by c. £3.0bn and centre cash by c. £3.9bn
  • Build on announced sales of Singapore, Vietnam, Hong Kong, Indonesia and Turkey

Robust financial strength

  • Solvency II shareholder cover ratio‡# of 202% (2019: 206%) and centre liquidity of £4.1bn (2019: £2.4bn)
  • Solvency II debt leverage ratio of 31% (2019: 31%)

Delivering against our capital framework

  • Expect £1.7bn debt reduction in H1 2021 including £800m tender offer announced today
  • Investing for cash generative growth in our Core markets
  • Expect to return to shareholders excess capital above 180% Solvency II shareholder cover ratio‡#
  • Total dividend of 21p (2019: 15.5p per share) with a final proposed dividend of 14p per share

Targeting sustainable growth across the UK, Ireland and Canada

  • Momentum with record trading in Savings & Retirement, BPA and Group Protection
  • New cumulative cash remittance‡# target of over £5bn between 2021-23 with guidance for £1.8bn in 2023
  • First major insurer globally to target Net Zero greenhouse emission status by 2040

Amanda Blanc, Chief Executive Officer, said:

“Over the past year we have supported our customers in the most challenging of circumstances. Across the whole of Aviva our people have been outstanding and I cannot thank them enough for all they have achieved.

2020 was a year of significant change for Aviva. We have taken major steps forward in simplifying the business, most recently with the sale of Aviva France and today’s announcement of the sale of the rest of our Italian operations. Our strategic focus is now on the UK, Ireland and Canada where we have leading positions. We are putting customers at the heart of everything we do and I am confident we will transform Aviva’s financial performance and deliver greater value for our shareholders. I recognise we have much more to do and we are getting on with it.

Our performance in 2020 demonstrates the resilience of our Core businesses and our growth potential. We delivered record sales in group protection; record sales of bulk purchase annuities; and record net flows in savings and retirement, where we are the largest provider of workplace pensions in the UK.

Aviva is financially strong and following the completion of the major disposals, we will be in a position to make a substantial return of capital to our shareholders. We are also announcing today an £800m debt tender offer. This allows us to accelerate our debt reduction plans and lower debt by a total of £1.7bn in the first half of this year.

Aviva is proud to be the UK’s leading insurer. We are the only insurer in the UK to meet the needs of customers at every stage of their lives. Our potential is clear and we are determined to realise it for the benefit of our customers, our people and our shareholders.”

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Transcript  for video Aviva plc 2020 preliminary results announcement

Hi everyone.

Eight months ago, we embarked on a radical and exciting plan to transform Aviva.

I said we would focus the portfolio, transform performance and improve our financial strength. It is a bold strategy and, at the time, some said we couldn’t do it, that Aviva was too big and too complex to ‘fix’. I asked them to judge me, to judge us all, on our performance against those ambitions.

So, eight months in, how have we done?

I said we’d focus the portfolio on the businesses where we have the strongest market positions; the UK, Ireland and Canada. We’ve made great progress on that front. Our businesses in France,

Singapore, Hong Kong, Indonesia, Vietnam, Turkey and Italy, as we’ve just announced this morning, have moved, or will shortly move, to new ownership. I’ve always said these are great businesses, but I’ve also said there may be better homes for them than Aviva. I know we absolutely have found the right partners for all of them.

These sales give us the opportunity and the resources to concentrate our efforts on our three core markets where we are very confident we can be the leading player. They have strengthened our financial position and realised significant value for our shareholders.

Our second priority is to transform our performance. Again, we’re making good early progress here. Despite all the challenges 2020 threw at us, trading has been robust, and we have had some top performances in our key growth areas:

·       8% year-on-year growth in commercial lines

·       A record of £6bn of BPA new business sales

·       And £8.5bn of savings and retirement net flows

Other parts of the business, such as Personal Lines, Individual Protection, and Aviva Investors, performed less well and we need to do better. We know where the issues are, and we are addressing them. We’re on track to deliver £300m cost savings by the end of 2022, with £180m achieved so far. And all of this contributed to £2.5bn of operating profit and £1.4bn of cash remitted to the group from our core markets. Our performance is improving, and while we’ve got a long way to go yet, the early indications are good.

Finally, our third priority is improving our financial strength. We continue to benefit from a robust balance sheet, and a healthy capital surplus and cover ratio. Addressing our debt leverage is a key part of restructuring the group so I’m delighted to say that, thanks to the sale of our non-core assets, we will look to reduce our debt by £1.7bn during the first half of 2021. We’re also announcing a Full Year 2020 dividend of 21p per share, with a final dividend of 14p per share. This is in line with our stated intent to deliver a sustainable, ordinary dividend for our shareholders. So far, so good. It’s clear we are doing what we said we would.

But let me be very clear, there is a long way to go until we fully unlock the true potential of Aviva for our shareholders, our customers and our people. This is just the start. Ultimately everything we do is centred around the needs of our customers. Aviva is the only insurer in the UK that can serve all our customers’ needs, at every stage of their lives. That’s a unique ability and we need to make much better use of that than we have in the past.

We are determined to help more customers and satisfy more of their needs. But we can only do this if we stick to the plan and execute it brilliantly and consistently. We can only do this if we remain focused on what our current and future customers want. Which is: fair prices, a trusted brand that delivers on its promises, excellent service and ease of access to a company that acts in a sustainable and responsible way. It’s actually pretty simple. So, we’re going to press on with it, simplifying, automating and digitising what we do to ensure that we can meet those expectations.

There are material opportunities to build upon our success and deliver growth; Commercial and Personal Lines, Savings & Retirement, Workplace Pension, Bulk Purchase Annuities. We will allocate our capital and target our attention towards these opportunities.

We’re going to keep working on bringing this business together, creating a culture that sees people rather than policies and recognises that behind every interaction and every spreadsheet there is a real life with real needs.

We’ll soon be relaunching our brand to ensure that not only does it better reflect what all of Aviva does but that it has genuine meaning and value to the lives of our current and future customers. And, as we announced this week, we’re going to raise our ambition on sustainability, aiming to be a carbon Net Zero business by 2040. That is a huge challenge, probably the most difficult thing we have ever taken on at Aviva. But as with everything we are trying to do here, it has to be bold, it has to be stretching, because to be number one, to be the leader in our markets, sometimes we have to take a deep breath and just go for it.

These are exciting times to be part of Aviva; we are doing important things that will have lasting consequences. I know that, at times, this may be daunting, yet the only way to have the kind of business we all want is to challenge ourselves constantly to find a better, more efficient or exciting way of doing things. You know I have big ambitions for Aviva. There is still a long way to go, but much to get excited about in the months and years to come.

So, I would like to finish by thanking everyone at Aviva, for everything you have done. It is only because of you, your belief in what we are doing and your determination to make it work, that we are able to close 2020 on such a positive note.


# Symbol denotes key financial performance indicators used as a base to determine or modify remuneration.

Denotes Alternative Performance Measures (APMs) and further information can be found in the "Other information" section of the full year 2020 preliminary results announcement.

1 Operating profit represents Group adjusted operating profit which is a non-GAAP APM. Operating profit is not bound by the requirements of IFRS. Further details of this measure are included in the "Other information" section of the full year 2020 preliminary results announcement.

Notes to editors

All comparators are for the full year 2019 position unless otherwise stated.

Income and expenses of foreign entities are translated at average exchange rates while their assets and liabilities are translated at the closing rates on 31 December 2020. The average rates employed in this announcement are 1 euro = £0.88 (2019: 1 euro = £0.88) and CAD$1 = £0.58 (2019: CAD$1 = £0.59).

Growth rates in the press release have been provided in sterling terms unless stated otherwise. The full year 2020 preliminary results announcement presents this information on both a sterling and constant currency basis.


Investor contacts

Jakub Rosochowski
+44 (0) 7385 382206

Media contacts

Andrew Reid
+44 (0)20 7662 3131

Sarah Swailes
+44 (0)20 7662 6700


Presentation slides: 0700 hrs GMT
Real time media conference call: 0730 GMT
Analyst conference call / audiocast: 0830 hrs GMT

Download our preliminary results announcement PDF (1.80 MB)

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