No results season is complete without the turn of insurance giant Aviva Plc revealing how it’s been performing – this time around, the insurer finds itself in the red.
According to Aviva, its IFRS (International Financial Reporting Standards) loss for the first half of 2021 amounted to £198 million. In the same six-month span last year, the group enjoyed an £874 million profit. The result was attributed to non-operating items, including a £538 million charge on the expected loss on disposal of France and investment variances on Aviva’s continuing operations.
Aviva expects to eventually recognise a profit on disposals of Poland and the remaining Italian operations on completion.
Operating profit, meanwhile, stood at £1.13 billion, which is slightly lower than the £1.23 billion posted in the second half of 2020. Of the sum for H1 2021, £725 million came from the group’s continuing operations.
“The breadth of Aviva, across life insurance and general insurance, is a key strategic advantage and has driven a 17% increase in operating profit to £725 million,” said group chief executive Amanda Blanc (pictured). “We also delivered some of our best-ever sales figures in the first six months.”
The CEO also highlighted that Aviva is on track to deliver the group’s £300 million savings target in 2022. Additionally, her camp is keen on achieving top quartile efficiency in all Aviva businesses.
“While we’ve got more to do, our half-year results show we have what it takes to drive growth in our businesses,” asserted Blanc. “We remain completely focussed on transforming performance, capitalising on the breadth of Aviva, making insurance simple and easy for our customers, and creating value for our shareholders.”
Aviva’s focus is on its “strongest and most strategically advantaged businesses” in the UK, Ireland, and Canada. It has, however, retained strategic investments in India, China, and Singapore, providing the group with opportunities in what were described as attractive and fast-growing markets.
Meanwhile, in line with the insurer’s capital framework, the company announced its intention to return at least £4 billion of capital to shareholders by half-year 2022, including as much as £750 million through share buyback to commence immediately.
The Aviva board also declared an interim dividend worth 7.35 pence per share, which is 5% higher than last year’s. Blanc said this is in light of their confidence in the strength of the business and underlying cash flows.
