Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Aviva’s chief executive has said “greater economic stability and political certainty” is making its UK home market more attractive for investment and growth, after the company posted better than expected results.
The FTSE 100 insurance group, which also operates in Ireland and Canada, reported a 14 per cent rise in first-half adjusted operating profit to £875mn.
A significant contributor was its general insurance business, where premiums were up 15 per cent to £6bn, helped by a better underwriting performance in the UK and Ireland.
The group said it was maintaining “strong pricing discipline in the inflationary environment”. Prices for home and motor insurance have risen sharply in recent years, in line with increased claims costs for insurers.
Chief executive Amanda Blanc said trading conditions across its markets were “excellent”, and highlighted the UK.
“We see many reasons to invest here, including greater economic stability and political certainty,” she said in the results statement.
“This encouraging backdrop — and Aviva’s continued strong financial performance — means we are increasingly confident we can deliver even more for our customers and shareholders.”
Assets under management in its wealth business grew to £186bn thanks to higher net inflows compared with the first half of last year.
Sales in its retirement division were lower, with sales of bulk annuities — insurance policies that cover corporate pension liabilities — in the period slowing slightly from £2.4bn to £2.3bn. But the company said it anticipated it would meet its three-year target of doing £15bn to £20bn of these deals.
Aviva left its longer-term targets for group performance unchanged. Its shares were flat in early trading.
The group’s Solvency II capital coverage ratio — the amount of capital it has compared with regulatory requirements — was 2 percentage points lower than at the year end, at 205 per cent. But this was also ahead of consensus estimates collated by the company.
Analysts at Citigroup said earnings upgrades were “likely to follow” after a “solid set of numbers,” and solvency levels that were ahead of expectations. Jefferies said the company “continues to demonstrate strong delivery versus its targets”.
The results come as Aviva’s investment management business agreed to sell a portfolio of 32 UK wind farms to a consortium led by Hong Kong’s CK Infrastructure.
