Strategic delivery and continuing momentum as we look forward with growing confidence.
Record quarterly Savings & Retirement net flows and highest Q1 sales1 in General Insurance for a decade
- Core Life PVNBP of £8.3bn (Q120: £8.3bn) with growth in Savings & Retirement and lower volumes of Annuities & Equity Release in a subdued market compared to a strong start in 2020
- Core General Insurance gross written premiums (GWP) up 4% to £2.0bn (Q120: £1.9bn) and COR 90.6% (Q120: 118.7%)
|Workplace||Adviser Platform||Annuities & ER||GI Commercial Lines||GI Personal Lines|
|Net flows +26%||Net flows +29%||PVNBP (52)%||GWP +11%||GWP (1)%|
|Q120: £1.2bn||Q120: £1.1bn||Q120: £2.2bn||Q120: £784m||Q120: £1,136m|
Strategic delivery with 8 businesses sold for £7.5bn with proceeds expected by end of 2021
- Now completed disposals of Aviva Vita and Turkey and signed the Sale & Purchase Agreement in France following conclusion of the consultation processes
- Substantial return of capital to shareholders following completion of the announced transactions
Significant financial strength
- Solvency II shareholder cover ratio of 209% (FY20: 202%) and centre liquidity (Apr 21) of £2.9bn (Feb 21: £4.1bn)
- Solvency II debt leverage ratio of 28% (FY20: 31%) reflecting successful £1bn tender in Q121 with a further reduction of 2% reflecting £0.9bn of upcoming maturities expected in the second quarter
Greater focus on improving the performance of the business
- Core controllable costs2 (excluding cost reduction implementation and IFRS 17 costs) of £720m (Q120: £725m) on track to achieve savings of £300m relative to our 2018 baseline in 2022
- Investment in organic growth and simplifying the business where we see clear benefits for shareholders
Amanda Blanc, Group Chief Executive Officer, said:
“We made very good progress in the first quarter. We concluded the refocus of our portfolio, selling eight non-core businesses which will generate total cash proceeds of £7.5 billion once completed. We have made excellent headway in reducing leverage with debt reduction of £1.9 billion in the first half of 2021 and we expect the leverage ratio to be around 26% at the half year.
We are now focused on improving the growth and profitability of our businesses in the UK, Ireland, Canada and Aviva Investors. We are pleased with the growing momentum in key areas as we capitalise on our leading market positions. Net flows in Savings & Retirement increased by 31% and Aviva Investors is seeing improving flows and investment performance. Demand for bulk purchase annuities was subdued in the first quarter but we have seen a good start to the second quarter. Sales1 in commercial insurance continue to grow strongly, up 13% in the UK and 6% in Canada, while in UK personal lines we maintained premiums while growing market share.
We have continued to support our customers dealing with COVID, including extending cover and deferring monthly payments for those experiencing financial difficulty.
Our positive trading performance in the first quarter of 2021 reinforces our confidence in the targets we announced earlier in the year. Nevertheless, we remain sharply focused on further improving performance, recognising we still have much more to do, to deliver stronger returns for our shareholders."
1 References to sales represent present value of new business premiums (PVNBP) for our life business and gross written premiums (GWP) for our general insurance business, which are APMs and further information can be found in the 'Other information' section of the Preliminary Announcement 2020. Reference to record Q1 sales refers to core GI markets in the UK, Ireland and Canada.
2 Core controllable costs include core markets (including Aviva Investors discontinued operations in France and Poland), corporate centre and other Group operations.
*This announcement contains inside information. The person responsible for making this announcement on behalf of the Group is Kirstine Cooper (Group Company Secretary).
+44 (0)7800 694 276
+44 (0)7800 694 859
+44 (0)7385 382 206
+44(0) 7800 691 138
+44(0) 7837 234 388
An analyst call will take place at 0830hrs BST on 27 May 2021 and will be live-streamed via our website. A replay will be available after the event.
Notes to editors:
- All figures have been retranslated at average exchange rates applying for the period, with the exception of the capital position which was translated at the closing rates on 31 March 2021. The average rates employed in this announcement are 1 euro = £0.88 (Q120: 1 euro = £0.86) and CAD$1 = £0.57 (Q120: CAD$1 = £0.58).
- Throughout this trading update we use a range of financial metrics to measure our performance and financial strength. These metrics include Alternative Performance Measures (APMs), which are non-GAAP measures that are not bound by the requirements of IFRS and Solvency II. A complete list and further guidance in respect of the APMs used by the Group can be found in the 'Other information' section of the Preliminary Announcement 2020.
- Aviva exists to be with people when it really matters, throughout their lives. We have been taking care of people for more than 320 years, in line with our purpose of being ‘with you today, for a better tomorrow’. In 2020, we paid £30.6 billion in claims and benefits to our customers.
- We are focused on the UK, Ireland and Canada where we have leading market positions and significant potential. We will invest for growth in these markets. We will also transform our performance and improve our efficiency. Our transformation will be underpinned by managing our balance sheet prudently, reducing debt and increasing our financial resilience. We also have strategic investments in Singapore, China and India.
- Total group assets under management at Aviva Group as at 31 December 2020 are £535bn and our Solvency II shareholder capital surplus is £12.5bn as at 31 March 2021. Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
- For more details on what we do, our business and how we help our customers, visit www.aviva.com/about-us