Aviva plc has announced its interim results for 2024, with the company reporting growth across key financial metrics.
The group's operating profit rose by 14% to £875 million, up from £765 million in the same period last year. Additionally, Solvency II operating own funds generation (OFG) increased by 10% to £758 million, compared to £686 million in the first half of 2023. Underlying Solvency II OFG saw a notable rise of 27% to £768 million, up from £605 million.
The insurer also reported a 17% increase in Solvency II operating capital generation (OCG), reaching £722 million, up from £618 million the previous year. Underlying Solvency II OCG grew by 42% to £739 million, from £522 million. The Solvency II return on equity improved to 12.4%, compared to 11.5% in the same period last year.
Aviva’s cash remittances rose by 16% to £959 million, and sales in its insurance, wealth & retirement division grew by 12% to £19.7 billion. General insurance premiums increased by 15% to £6.005 billion, with an undiscounted combined operating ratio (COR) of 95.4% and a discounted COR of 91.5%.
The group’s IFRS profit for the period amounted to £654 million, up from £415 million in 2023.
Aviva also noted that it maintains a strong and resilient capital position, with a Solvency II shareholder cover ratio of 205%, slightly down from 207% at the end of 2023. Centre liquidity stood at £1.5 billion as of July 2024, down from £1.9 billion in February. The Solvency II debt leverage ratio was 31.1%, or 28.8% pro forma following the redemption of Tier 2 notes on 3 July 2024.
The company declared an interim dividend per share of 11.9p, representing a 7% increase from the previous year. Aviva also executed a £300 million share buyback in the first half of 2024 and anticipates further returns of capital in the future.
Aviva continues to experience capital-light growth momentum, particularly in its UK and Ireland general insurance division, where premiums rose by 18% to £3.809 billion. UK personal lines premiums increased by 30%, driven by pricing discipline in an inflationary environment and new propositions, while UK commercial lines premiums grew by 10%.
In Canada, general insurance premiums increased by 10% to £2.196 billion. Personal lines grew by 14%, driven by new business growth in auto and robust pricing actions on the existing portfolio. Commercial lines saw a 6% rise, benefiting from strong retention in a favourable rating environment and new business within the GCS segment.
The distribution ratio remained largely stable at 33.3%, compared to 33.1% in the previous year.
Operating profit for Canada General Insurance decreased by 7% to £216 million, down from £240 million in the same period last year. The undiscounted combined ratio was 94.7%, compared to 92.8% previously, mainly due to lower large loss commercial lines experience in the prior period. The discounted COR stood at 90.4%, compared to 89.0% last year.
Solvency II OFG also declined by 7% to £161 million, down from £179 million, reflecting similar factors. However, cash remittances increased to £73 million, compared to £36 million in the prior year.
The completion of the AIG UK protection acquisition in April contributed to a 49% increase in protection sales, while Health in-force premiums grew by 10%. Wealth net flows reached £5.0 billion, up 16%, with assets under management (AUM) growing to £186 billion from £170 billion at the end of 2023.
Retirement sales were slightly lower at £3.036 billion, down from £3.223 billion in the same period last year, largely due to a contraction in the equity release market. However, volumes for completed bulk purchase annuity (BPA) schemes have risen to £4.1 billion. Value of new business (VNB) increased by 41% to £105 million, reflecting improved margins.
Aviva Investors also originated £1.4 billion of real assets for the annuities business in the first half of 2024. Approximately 70% of workplace net flows were directed into Aviva Investors funds, with external net flows remaining positive at £0.3 billion.
Looking ahead, Aviva said that it remains confident in meeting its targets outlined in its full-year 2023 results presentation, including an operating profit of £2 billion by 2026, Solvency II OFG of £1.8 billion by 2026, and cash remittances exceeding £5.8 billion cumulatively from 2024 to 2026.
The company plans to further invest in its business and pursue targeted mergers and acquisitions to reach close to 70% capital-light on an operating profit basis by 2026. The general insurance division will continue to focus on appropriate pricing, while health and wealth businesses are expected to see continued growth. Aviva also aims to complete its three-year ambition of £15 to 20 billion in BPA volumes by writing £7-8 billion this year.
Aviva’s Group CEO, Amanda Blanc (pictured above), commented on the results, noting that sales, operating profit, and dividends are all up.
She highlighted that the company’s strategy to deliver more for both customers and shareholders is progressing well. Aviva has seen growth across the board, benefiting from its leading positions in markets like workplace pensions and general insurance in the UK and Canada.
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