Strong, profitable growth in the first half of 2023 – those are the words that can be used to describe the latest set of financial results from insurance giant Aviva, although they do come with one caveat.
The numbers speak for themselves: operating profit was up 8% to £715 million, and Solvency II own funds generation climbed by 26%. However, the firm did see its combined operating ratio slide to a still healthy 94.8%, having previously sat at 93.8% in the first-half of 2022.
Focusing in specifically on its general insurance business, the numbers look even more glowing - Aviva saw gross written premiums climb by 12% to sit at £5,274 million – that compares to £4,694 million in the same period last year. Its discounted COR sat at 91.3%, compared to 92.8% in the prior year, and operating profits jumped 29% to £470 million.
No wonder then that CEO Amanda Blanc delivered a positive outlook.
“Aviva is delivering consistently strong and profitable growth,” she said. “In the first half of 2023 we grew sales, operating profit and dividends for our shareholders. Our excellent trading momentum is a direct result of the decisions we have taken over the last three years to re-focus Aviva. Today, Aviva has leading positions in growing markets, providing strong resilience in the current economic climate.”
Focusing on the UK & Ireland market, she outlined that general insurance premiums were up 13% - pointing to “healthy sales” across both commercial and personal lines business, with the Aviva Zero product proving a particular standout, attracting 250,000 new policies since its launch.
In Canada, the picture was similarly rosy. General insurance GWP climbed by 12% to £2,055 million while the undiscounted COR sat at 92.8% (from 91.8% last year).
“Our excellent Canadian general insurance business is also growing well, with sales 12% higher as a result of a strong performance in commercial lines, and the continued success of our local banking partnership,” Blanc commented.
In general insurance, the firm concluded that it “remained focused” on appropriate pricing for the inflationary environment, and that it expected the rating environment to remain favourable for both commercial and personal lines. It did note, however, that the favourable weather conditions of the first-half were unlikely to repeat, and this could impact performance.
Overall, group operating profit is expected to grow from 5-7% year on year.
