Another day… another set of financial results for one of the largest insurance companies in the world: and on this occasion the results were “encouraging” as Aviva
hiked its dividend by 10% largely thanks to a strong performance from its life insurance business.
’s operating profits were able to climb by 13%, reaching £1.33 billion compared to £1.17 billion during the previous year. Indeed its earnings per share also climbed by 1%.
Placing the focus on its general insurance business, net written premiums increased by 7% to stand at £3.99 billion – this represented an increase from £3.68 billion during the same period in the previous year. At the heart of its growth has also been a strong performance from its life insurance arm, with the value of new business leaping by 7% from £534 million to £583 million.
There were caveats to the success, however.
Even though business and profits were up for the six months, the company’s combined operating ratio in its general insurance business - a key measure in underwriting profitability - actually weakened from 93.1% to 96.2% with the blame placed on the significant increase in natural catastrophe costs, payments into Flood Re and the strain of a new distribution partnership. In addition, its operating expenses also climbed from £1.5 billion to £1.7 billion although this was largely attributed to the acquisition of Friends Life.
Speaking about the results, Aviva
’s group chief executive Mark Wilson was positive about business both inside and outside the UK, while outlining plans for further investment.
“We are delivering consistent, stable and predictable growth despite challenging market conditions,” he said. “Our UK businesses delivered encouraging results.
“We are growing in the UK, we are investing in the UK. We like the UK. And we are also benefitting from Aviva
’s diversity, with 42% of our earnings coming from outside the UK.
’s strong financial position and diversity mean we are well insulated from external events. We have deliberately designed Aviva
to be resilient to a low interest rate environment.”
The company appears confident in its abilities to deliver further success going forward. As part of the company’s conference call, Insurance Business UK
quizzed Wilson and Maurice Tulloch, chairman of global general insurance for the firm, about the future of the broker market. We will bring you those comments as part of an in-depth report tomorrow.
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