Aviva (AV.) is “well past the fix stage”, according to chief executive Mark Wilson. The composite insurer is finessing its strategy to withdraw from non-core markets, invest in growth geographies and improve cash generation. After announcing plans to sell Friends Provident International and most of its Spanish business, management sealed a 10-year renewal to its distribution agreement with HSBC (HSBA), for which it provides white-label insurance products.
The UK life business made a special remittance of £315m to the insurer, taking the total to £565m since its acquisition of Friends Life, and on track for its £1bn target by end-2018. This helped boost cash remittances from its businesses by more than half to £1.17bn. UK and Ireland life business grew operating profit by 6 per cent to £756m, helped by annuities and equity release.
The combined ratio (of claims and other costs to income) for the UK and Ireland general insurance business improved to 92.5 per cent, thanks partly to fewer weather-related claims. However, in Canada claims continued to be above the long-term average, pushing up the combined ratio to 98.9 per cent.
Aviva Investors gained £534m in net inflows, taking assets under management to £351bn. Its flagship multi-asset funds doubled in assets to £12bn.
Analysts at Deutsche Bank expect adjusted EPS of 53p during the 12 months to December 2017 (from net income of £2.29bn), up from 50.7p in 2016.
| AVIVA (AV.) | ||||
| ORD PRICE: | 538.5p | MARKET VALUE: | £21.8bn | |
| TOUCH: | 537.5-538.5p | 12-MONTH HIGH: | 550p | LOW: 382p |
| DIVIDEND YIELD: | 4.5% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 446p* | SOLVENCY II RATIO: | 193% | |
| Half-year to 30 Jun | Gross premiums (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 12.6 | 0.66 | 2.5 | 7.42 |
| 2017 | 13.6 | 1.03 | 14.9 | 8.4 |
| % change | +8 | +57 | +496 | +13 |
| Ex-div: | 05 Oct | |||
| Payment: | 17 Nov | |||
| *Includes intangible assets of £6.8m, or 167p a share | ||||
