LONDON--(Marketwired - Nov 7, 2013) -
Start
News Release
Aviva plc
Interim management statement for the nine months to 30 September 2013
07 November 2013
Aviva plc Third Quarter 2013
Interim Management Statement
Mark Wilson, Group Chief Executive Officer, said:"Progress is in line with our expectations and we remain focused on
delivering cash flow plus growth. In the first nine months of 2013 our
key measure of growth, value of new business, increased by 14%. We had
strong performances from France and our growth markets of Turkey,
Poland and Asia. Conversely, value of new business remains depressed in
our turnaround businesses of Italy and Spain, and this is being
addressed."Capital generation in the period was stable at GBP1.3 billion and our
economic capital surplus now stands at GBP8 billion. We continue to
make satisfactory progress on cost reduction, with operating expenses
10% below the 2011 baseline."Aviva remains in the early stages of turnaround. Whilst we have
resolved a key issue in the disposal of our US business and have made
progress in a number of areas, there remains much work to be done."
Cash flow - Operating capital generation stable at GBP1.3 billion1
(9M12: GBP1.3 billion)
- Continued focus on improving remittance ratios
- Full update on cash remittances to be provided at the
year end
Expenses - Operating expenses of GBP2,277 million, 10% lower than
our 2011 baseline
Value of new - Value of new business up 14% to GBP571 million2 (9M12:
business GBP503 million)
- Increase driven by France (+33%) and our growth
markets of Turkey (+40%), Poland (+48%) and
Asia (+43%)
- Growth markets contributed 22% of value of new
business (9M12: 18%)
Combined - Combined operating ratio stable at 96.9% (9M12: 96.7%)
operating
ratio
Balance sheet - Pro forma3 economic capital4 surplus at GBP8.0 billion
(HY13: GBP7.6 billion)
- IFRS net asset value per share 273p (HY13: 281p)
- MCEV5 net asset value per share 437p (HY13: 441p)
- Completed sale of US business for US$2.6 billion6
(GBP1.6 billion) in October
1 On a continuing basis. All numbers are continuing unless otherwise
stated.
2 On a continuing basis excluding Malaysia and Sri Lanka.
3 The pro forma economic capital surplus includes the impact of the US
Life transaction and an increase in the risk allowance for staff
pension schemes from five to ten years of stressed contributions.
4 The economic capital surplus represents an estimated position. The
capital requirement is based on Aviva's own internal assessment and
capital management policies. The term 'economic capital' does not imply
capital as required by regulators or other third parties.
5 In preparing the MCEV information, the directors have done so in
accordance with the European Insurance CFO Forum MCEV Principles with
the exception of stating held for sale operations at their expected
fair value, as represented by expected sale proceeds, less cost to
sell.
6 Transactional proceeds include repayment of an external loan of
US$290 million.
Page 2
Key financial metrics
Operating Capital Generation
9 months 9 months
2013 2012
Continuing Operations GBPbn GBPbn
United Kingdom & Ireland life 0.4 0.5
United Kingdom & Ireland general insurance & health 0.3 0.3
Europe 0.5 0.4
Canada 0.1 0.1
Asia & Other - -
Total 1.3 1.3
Expenses
9 months 2013 9 months 2012 Sterling%
Continuing operations GBPm GBPm change
Operating expenses 2,277 2,449 (7)%
Integration & restructuring costs 198 252 (21)%
Total expenses 2,475 2,701 (8)%
Value of new business
9 months 9 months
2013 2012 Sterling%
Continuing operations GBPm GBPm change
United Kingdom 302 288 5%
Ireland 2 (11) -
France 112 84 33%
Poland 34 23 48%
Italy 7 19 (63)%
Spain 19 32 (41)%
Turkey 28 20 40%
Other 1 2 (50)%
Asia1 66 46 43%
Value of new business - ongoing basis 571 503 14%
Effect of disposals (Malaysia & Sri Lanka) 1 8 (88)%
Value of new business 572 511 12%
General insurance combined operating ratio
9 months 9 months
Continuing operations 2013 2012 Change
United Kingdom 95.5% 97.0% (1.5)pp
Ireland 98.3% 105.3% (7.0)pp
France 97.4% 94.9% 2.5pp
Italy 95.9% 100.9% (5.0)pp
Other Europe 109.2% 119.8% (10.6)pp
Europe 98.3% 99.5% (1.2)pp
Canada 95.2% 92.6% 2.6pp
General insurance combined operating ratio 96.9% 96.7% 0.2pp
Capital position
Pro forma3 Pro forma3
30 September 30 June 30 September 30 June
2013 2013 2013 2013
GBPbn GBPbn GBPbn GBPbn
Estimated economic capital surplus2 8.0 7.6 7.4 7.1
Estimated IGD
solvency surplus 3.7 3.7 4.0 4.2
IFRS net asset value
per share 273p 281p
MCEV4 net asset value
per share 437p 441p
1 Excluding Malaysia and Sri Lanka.
2 The economic capital surplus represents an estimated position. The
capital requirement is based on Aviva's own internal assessment and
capital management policies. The term 'economic capital' does not imply
capital as required by regulators or other third parties.
3 The pro forma economic capital and IGD surpluses include the
impact of the US Life transaction and, for economic capital only, an
increase in pension scheme risk allowance from five to ten years of
stressed contributions.
4 In preparing the MCEV information, the directors have done so in
accordance with the European Insurance CFO Forum MCEV Principles with
the exception of stating held for sale operations at their expected
fair value, as represented by expected sale proceeds, less cost to
sell.
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