TIDMAV.
RNS Number : 0202S
Aviva PLC
11 November 2021
Page 1
News Release
11 November 2021
Aviva plc Q3 2021 Trading Update
Growth and strategic execution drive strong year-to-date
performance at Aviva
Remain on track to meet or exceed cash remittance and cost
saving targets
Strong solvency and liquidity positions. Capital return of at
least GBP4bn underway with c.GBP450m of the GBP750m share buyback
completed
Savings & Retirement Annuities & General Insurance(1) Aviva Investors Solvency II
Equity Release
GBP7.3bn GBP5.3bn GBP6.5bn GBP1.6bn 215%
Net flows +21% PVNBP (14)% GWP +5% Ext. net flows Cover ratio
+37% +12pp
9M20: GBP6.0bn 9M20: GBP6.2bn 9M20: GBP6.2bn 9M20: GBP1.2bn HY21: 203 %
---------------------- ----------------- ---------------------- --------------
Amanda Blanc, Group Chief Executive Officer, said:
"Aviva has delivered strong performance in the first nine
months. Record inflows in Savings & Retirement and excellent
growth in General Insurance support our confidence in Aviva's
growth potential. Savings & Retirement net flows were up 21%
year-to-date, continuing the strong first half performance. Bulk
annuity volumes accelerated sharply in the third quarter. General
Insurance premiums(1) grew 5% year-to-date reflecting solid
customer retention and new business wins, particularly in
commercial lines.
"We continue to make excellent and rapid strategic progress,
right across Aviva. The completion of disposals in France and Italy
GI since the half year are significant milestones as we deliver a
radically simplified and refocused Aviva. We are delivering our
commitment to return at least GBP4bn of capital to shareholders,
with c.GBP450m of the GBP750m share buyback already successfully
completed.
"Aviva is targeting Net Zero by 2040 and we welcome the
Government's plan, mandating financial institutions to publish
transition plans. This will help to ensure that every firm making a
Net Zero commitment - whether an insurer, a bank or an asset
manager - is doing so in a robust and consistent way.
"We look forward with confidence. We expect the good trading
momentum to continue in the fourth quarter, and we remain on track
to meet or exceed our cash and cost saving targets."
Strong growth in Life sales(2) and GI premiums
-- UK&I life sales of GBP25.3bn (9M20: GBP21.8bn) with
strong growth in Savings & Retirement. Improved annuity volumes
versus the first half with GBP2.4bn BPAs written in Q321, bringing
9M21 volumes to GBP4.0bn (9M20: GBP5.0bn).
-- General Insurance gross written premiums (GWP)(1) up 5% to
GBP6.5bn at 9M21 (9M20: GBP6.2bn) and COR(1) 92.4% (9M20:
98.1%).
Continued focus on cost efficiency
-- Controllable costs(1,3) down 2% (excluding cost reduction
implementation and IFRS 17 costs) to GBP2,045m at 9M21 (9M20:
GBP2,080m) despite the headwinds of inflation and targeted
investments in growth.
-- On track to achieve savings target of GBP300m in 2022
relative to our 2018 baseline and net of inflation. Focus over the
longer term remains to deliver top-quartile cost efficiency.
Positive outlook for cash remittances
-- Expecting strong growth in cash remittances for the year from
the GBP1.4bn achieved last year (9M21 continuing cash remittances:
GBP1.1bn) and we remain on track to achieve our target of over
GBP5bn in cumulative business unit cash remittances(1) in 2021 to
2023.
1 From continuing operations
2 References to sales represent present value of new business
premiums (PVNBP) which is an Alternative Performance Measure (APM)
and further information can be found in the 'Other information'
section of the 2021 interim results announcement.
3 Controllable costs represent other expenses from continuing
operations of GBP1.7bn for 9M21, reported in the IFRS consolidated
income statement, and adjusted to show the controllable operational
overheads associated with maintaining our businesses (for example
adjusted to include indirect acquisition costs, and exclude certain
amortisation and impairment charges and premium based taxes, fees
and levies that vary directly with premiums). Controllable costs is
an APM and further information can be found in the 'Other
information' section of the 2021 interim results announcement.
Page 2
Solvency and liquidity remain strong
-- Solvency II shareholder cover ratio of 215% at Q321 (HY21: 203%).
-- Pro forma prospective cover ratio at Q321 of c.197%, adjusted
for remaining disposals, illustrative capital return, further debt
reduction, and also for the estimated impact of interest rate
reduction between 30 September and 5 November 2021 (HY21: 195%) -
please refer to page 5 for further details.
-- Centre liquidity (Oct 21) of GBP4.5bn (Jul 21: GBP2.8bn),
with the increase since July mainly reflecting divestment proceeds
received.
-- Solvency II debt leverage ratio of 28% at Q321 (HY21: 26%).
Focus the portfolio nears completion. Capital return
underway
-- Recently completed disposals of France for GBP2.8bn and Italy
GI for GBP284m. The remaining completions in Poland, Italy (Life)
and Vietnam are expected by the end of the year, bringing to a
conclusion the GBP7.5bn divestment programme.
-- GBP750m share buyback commenced with c.GBP450m completed. We
expect at least GBP4bn to be returned by HY22 with further details
to be provided at FY21 results in March 2022 (subject to regulatory
and shareholder approvals, remaining completions and market
conditions).
Pages 3 to 6 of this release cover Q3 trading performance, capital, and
outlook in further detail
Page 3
Life sales(1) and Value of New Business (VNB)
PVNBP VNB
------ ------ ----------- ----- ----- -----------
9M21 9M20 Sterling 9M21 9M20 Sterling
GBPm GBPm % change GBPm GBPm % change
------------------------------- ------ ------ ----------- ----- ----- -----------
Savings & Retirement and Other 16,970 12,649 34% 141 79 78%
Annuities & Equity Release 5,294 6,163 (14)% 16 85 (81)%
Protection & Health 1,845 1,854 -% 146 125 17%
Ireland Life 1,210 1,170 3% 16 3 433%
------------------------------- ------ ------ ------ ----- ----- ------
UK & Ireland Life total 25,319 21,836 16% 319 292 9%
Strategic investments 909 502 81% 67 14 379%
------------------------------- ------ ------ ------ ----- ----- ------
Continuing operations 26,228 22,338 17% 386 306 26%
------------------------------- ------ ------ ------ ----- ----- ------
Discontinued operations 8,442 8,777 (4)% 302 397 (24)%
------------------------------- ------ ------ ------ ----- ----- ------
Total(2) 34,670 31,115 11% 688 703 (2)%
------------------------------- ------ ------ ------ ----- ----- ------
Strong 9M21 sales of GBP26.2bn, up 17%, in continuing
operations. VNB(3) is also up sharply versus the prior year, by 26%
to GBP386m.
Savings & Retirement
-- Overall sales were up 34% with Retail sales up 52%,
continuing the strong first half performance.
-- Workplace sales were up 24% due to increased membership in
existing schemes and good levels of new scheme wins, where our ESG
credentials are increasingly a key factor for employers selecting a
new provider.
-- VNB increased significantly, to GBP141m (9M20: GBP79m),
partly reflecting the strong sales performance.
Annuities & Equity Release
-- Sales were 14% lower at 9M21, mainly reflecting the lower BPA
volumes written in a subdued market in the first half of the year.
Activity has accelerated strongly in the third quarter with
GBP2.4bn of volumes written, bringing 9M21 volumes to GBP4.0bn.
-- VNB of GBP16m (9M20: GBP85m) reflects lower initial BPA
margins. This should improve as we progress toward our target asset
allocation and reinsurance in the fourth quarter, as seen in
previous years, albeit we expect full year 2021 margins to be below
2020 levels due to the low credit spread environment.
Protection & Health
-- Overall sales were flat. Health was up 12% at 9M21 driven by
positive reaction to our Expert Select proposition, which in Q3
helped deliver our highest quarterly retail volumes on record. In
October our Health business surpassed 1 million insured lives for
the first time.
-- Individual Protection sales were up 2% at 9M21 benefiting
from the opening up of the economy during the year, while we are
also making good progress in widening our distribution including in
digital channels. Group Protection was 16% lower, primarily due to
two large scheme wins in the prior period.
-- VNB grew 17% due to higher Individual Protection and Health
margins, reflecting changes in the business mix.
Ireland Life
-- Sales grew 3% at 9M21 driven by strong sales in unit-linked and protection business.
-- A rationalised new product offering with a focused fund range
for brokers and customers has improved margins with VNB up
significantly in the period.
Strategic Investments
-- Sales increase at 9M21 mainly reflects the inclusion of our
minority stake in Aviva SingLife, which was formed on 30 November
2020 following the disposal of Singapore (shown in discontinued
operations for 9M20).
-- Aviva SingLife has seen strong sales of long-term care in
2021, whilst China has seen good sales growth and improved
margins.
1 References to sales represent present value of new business
premiums (PVNBP) which is an Alternative Performance Measure (APM)
and further information can be found in the 'Other information'
section of the 2021 interim results announcement.
2 Excludes Aviva Investors
3 From continuing operations
Page 4
Savings & Retirement and Aviva Investors net flows(1) and
assets under management (AUM)
Net
flows Assets under management
----- ----- -------- --------------------------------
30 Jun
9M21 9M20 30 Sep 21
GBPm GBPm change 21 GBPbn GBPbn change
------------------------------------------- ----- ----- -------- ------------ -------- --------
Savings & Retirement 7,295 6,010 21% 145 141 3%
Aviva Investors 893 (443) 302% 263 260 1%
Of which: Aviva Investors external assets 1,601 1,171 37% 59 56 4%
------------------------------------------- ----- ----- ---- ------------ -------- ---
Savings & Retirement
-- Net flows were up 21% at GBP7.3bn (9M20: GBP6.0bn) benefiting
from record inflows in both Platform and Workplace.
-- Platform net flows grew by 62% to GBP4.2bn for 9M21 (9M20:
GBP2.6bn), while Q3 delivered our 2nd largest quarter ever of
inflows, following on from our largest ever quarter in Q1.
-- Workplace net flows remained strong at GBP3.6bn for 9M21
(9M20: GBP3.8bn), with record inflows for the year-to-date.
Aviva Investors
-- Positive net flows of GBP0.9bn (9M20: net outflows of
GBP0.4bn), excluding cash and liquidity funds, have improved in the
period driven by lower internal net outflows and external net flows
of GBP1.6bn (9M20: GBP1.2bn) as our trading momentum remains
strong.
-- Pipeline of third-party business remains healthy and our
shift in focus towards our strengths of ESG, real assets,
infrastructure and credit continues to deliver improvements.
General Insurance GWP and COR
GWP COR
----- ----- ---------- ----- ----- ---------- ----- ----- --------- --------- -------
Personal lines Commercial lines Total Total
9M21 9M20 9M21 9M20 9M21 9M20 9M21 9M20
Sterling Sterling Sterling
GBPm GBPm % change GBPm GBPm % change GBPm GBPm % change % % Change
------------- ----- ----- ---------- ----- ----- ---------- ----- ----- ---------- --------- --------- -------
(6.3)
UK 1,785 1,807 (1)% 1,895 1,635 16% 3,680 3,442 7% 94.2% 100.5% pp
(2.8)
Ireland 158 180 (12)% 155 133 17% 313 313 -% 90.2% 93.0% pp
(5.3)
Canada 1,653 1,630 1% 893 814 10% 2,546 2,444 4% 90.2% 95.5% pp
------------- ----- ----- ----- ----- ----- ---- --- ----- ----- --- ---- ----- ----- -------
Continuing
operations 3,596 3,617 (1)% 2,942 2,582 14% 6,539 6,199 5% 92.4% 98.1% (5.7)pp
------------- ----- ----- ----- ----- ----- ---- --- ----- ----- --- ---- ----- ----- -------
Discontinued
operations 1,384 1,339 3% 100.3% 93.1% 7.2pp
------------- ----- ----- ---------- ----- ----- ---------- ----- ----- --- ---- ----- ----- -------
Total 7,923 7,538 5% 93.8% 97.3% (3.5)pp
------------- ----- ----- ---------- ----- ----- ---------- ----- ----- --- ---- ----- ----- -------
Overall
-- Continuing operations GWP growth of 5% to GBP6.5bn (9M20:
GBP6.2bn), representing our highest premiums in a decade. The UK
delivered growth of 7% and Canada 4%.
-- COR from continuing operations improved by 5.7pp to 92.4%
(9M20: 98.1%) as a result of stronger underwriting performance, and
a reduction in COVID-19 related claims, partly offset by adverse
weather experience in Q3, following July flooding in the UK and
events in British Columbia, Alberta and Ontario in Canada.
-- Claims frequency in motor lines has begun to normalise as we
emerge from lockdown restrictions, albeit remaining below
pre-pandemic levels, while the softer rate environment in motor in
the UK, Ireland and Canada is now being reflected in earnings. We
continue to expect to achieve a COR across our continuing General
Insurance business of less than 94% in 2021.
UK & Ireland
-- UK commercial lines growth of 16% was driven by well-priced
new business opportunities, strong retention and continued rate
momentum, including growth of 20% in Global Corporate and Specialty
(GCS) lines and 12% in SME.
-- Our retail personal lines business in the UK grew 4% with
customers up 7% to 3.4m, reflecting the benefits of the successful
launch of the Aviva brand on price comparison websites, helping to
offset the impact of a soft rate market.
-- Total UK personal lines premiums were 1% lower with the
growth in retail being offset by lower sales through some of our
distribution partners and very low demand for travel insurance in
2021.
-- Ireland premiums were 3% higher at constant currency (flat on
a reported basis) with strong growth in commercial lines partially
offset by continued soft rate environment in motor.
Canada
-- Commercial lines premiums were 10% higher (as reported and at
constant currency), with the business benefiting from new business
activity, higher policy retention and the favourable rate
environment.
-- Personal lines premiums were 2% higher at constant currency
(1% higher on a reported basis), a strong result considering the
introduction of lower rates in Ontario, our largest market, in May
and June.
1 Aviva Investors net flows excludes liquidity funds and
cash
Page 5
Capital & Centre liquidity
Solvency II shareholder cover ratio
-- The cover ratio increased 12pp during the quarter to 215%
(HY21: 203%) driven by completion of the Aviva France disposal on
30 September 2021, Solvency II Operating Capital Generation (OCG)
and favourable market movements driven mainly by rising interest
rates.
-- This was partly offset by the 2021 interim dividend
(GBP0.3bn) and the commitment to return GBP750m of capital via a
share buyback, which has been fully recognised in our Solvency II
position.
Solvency II debt leverage ratio
-- Remains in-line with our less than 30% target, but increased
as expected to 28% from 26% at HY21 partly due to the GBP750m share
buyback and payment of the interim dividend.
Centre liquidity and cash remittance
GBPbn 9M21 9M20
---------------------------------------------- ---- ----
Cash remittances from continuing operations 1.1 0.6
---------------------------------------------- ---- ----
Cash remittances from discontinued operations 0.2 0.1
---------------------------------------------- ---- ----
Total cash remittances 1.3 0.7
---------------------------------------------- ---- ----
Oct Jul
21 21
---------------------------------------------- ---- ----
Centre liquidity 4.5 2.8
---------------------------------------------- ---- ----
-- Centre liquidity of GBP4.5bn as at the end of October 2021
(July 2021: GBP2.8bn), reflecting the proceeds from the sales of
Aviva France (GBP2.8bn) and Italy GI (GBP0.3bn), repayment of
GBP0.5bn of internal loan, payment of the interim dividend
(GBP0.3bn) in October and GBP0.4bn of share buyback up to the end
of October.
-- Cash remittances from continuing operations are GBP1.1bn at
9M21 (9M20: GBP0.6bn) with cash remittances for the full year
expected to be up strongly on the GBP1.4bn achieved last year.
Pro forma prospective Solvency II shareholder cover ratio,
liquidity and leverage
-- Pro forma Solvency II shareholder cover ratio allows for
completion of remaining disposals, an illustrative capital return
of GBP4bn which includes the GBP750m share buyback currently
underway, and further external debt reduction of c.GBP1bn. Pro
forma centre liquidity also allows for GBP0.7bn repayment of
internal loan (of which GBP0.5bn was repaid following completion of
the France sale).
Pro forma Pro forma
Pro forma estimated estimated
at HY at Q3
GBPbn unless otherwise stated 2021 Q3 change 2021
------------------------------------------------------- ------------ --------- ------------
Own funds 18.1 (0.2) 17.9
SCR (9.3) 0.3 (9.0)
------------------------------------------------------- ------------ --------- ------------
Surplus 8.8 0.1 8.9
------------------------------------------------------- ------------ --------- ------------
Solvency II Shareholder cover ratio (%) 195% 200%
------------------------------------------------------- ------ --- --------- ------ ---
Centre liquidity (July 2021 & October 2021 pro formas) 2.7 (0.4) 2.3
Solvency II debt leverage ratio 28% 28%
------------------------------------------------------- ------ --- --------- ------ ---
-- Our pro forma prospective cover ratio is estimated at 200%
which has increased 5pp during the quarter owing to favourable
market movements and Solvency II OCG, partly offset by the declared
interim dividend. Following the reduction in interest rates since
September 30, this ratio is estimated to be approximately 197% as
at close on 5 November 2021.
-- Estimated pro forma centre liquidity of GBP2.3bn is down
GBP0.4bn following payment of the interim dividend (GBP0.3bn).
-- The estimated SCR includes a c.GBP2bn benefit from
diversification between the continuing businesses.
Page 6
Outlook
Growth
-- We are confident that Aviva is well positioned to capitalise
on the growth opportunities in our core markets of UK, Ireland and
Canada.
-- We expect to see continued strong momentum in Savings &
Retirement. We expect to write GBP5-6bn of BPA volumes in total
this year, following strong sales in the third quarter and a good
pipeline of transactions.
-- Annuity & Equity Release margins should improve in the
fourth quarter but we expect them to remain below 2020 levels due
to the low credit spread environment.
-- In General Insurance, we continue to see good opportunities
for growth in commercial lines as we capitalise on our market
leading positions with brokers and the favourable rate
environment.
-- In personal lines, the softer rates in motor and the adverse
weather conditions in the second half of the year will impact
profitability, nevertheless we still expect the overall GI COR for
continuing operations to be below 94% for the full year.
-- We continue to expect the full year benefit from UK Life
management actions & other to be in the GBP0 - GBP200m
range.
Efficiency
-- Our focus on transforming performance means we are on track
to deliver our GBP300m cost reduction target in 2022 net of
inflation, including over GBP225m of cumulative savings by the end
of 2021.
-- Implementation costs to deliver the savings are expected to
be significantly higher in the second half compared to the first,
as more actions are completed as we work towards delivering our
target in 2022.
Cash
-- On track to achieve target of over GBP5bn in cumulative cash
remittances from continuing operations in 2021 to 2023; with cash
remittances for the full year expected to be up strongly on the
GBP1.4bn achieved last year (9M21 continuing cash remittances:
GBP1.1bn), and to continue to increase in 2022, as we grow toward
GBP1.8bn of cash remittances in 2023.
Page 7
Appendix: Q3 discrete quarter information
Life sales(1) and Value of New Business (VNB)
PVNBP VNB
------ ------ ----- -----
Q321 Q320 Sterling Q321 Q320
GBPm GBPm % change GBPm GBPm
------------------------------- ------ ------ ----------- ----- -----
Savings & Retirement and Other 5,271 4,073 29% 31 20
Annuities & Equity Release 2,828 2,325 22% (34) (88)
Protection & Health 590 562 5% 51 40
Ireland Life 390 400 (3)% 6 -
------------------------------- ------ ------ ------ ----- -----
UK & Ireland Life total 9,079 7,360 23% 54 (28)
Strategic investments 292 124 135% 8 4
------------------------------- ------ ------ ------ ----- -----
Continuing operations 9,371 7,484 25% 62 (24)
------------------------------- ------ ------ ------ ----- -----
Discontinued operations 2,564 3,097 (17)% 69 132
------------------------------- ------ ------ ------ ----- -----
Total(2) 11,935 10,581 13% 131 108
------------------------------- ------ ------ ------ ----- -----
Savings & Retirement and Aviva Investors net flows(3)
Net
flows
----- ----- ------
Q321 Q320 Change
GBPm GBPm GBPm
------------------------------------------- ----- ----- ------
Savings & Retirement 2,122 1,844 278
Aviva Investors 64 131 (67)
Of which: Aviva Investors external assets 517 (132) 649
------------------------------------------- ----- ----- ------
General Insurance GWP and COR
GWP COR
----- ----- ---------- ----- ----- ---------- ----- ----- ---------- -------- ------
Personal lines Commercial lines Total Total
Q321 Q320 Q321 Q320 Q321 Q320 Q321 Q320
Sterling Sterling Sterling
GBPm GBPm % change GBPm GBPm % change GBPm GBPm % change % % Change
------------- ----- ----- ---------- ----- ----- ---------- ----- ----- ---------- --------- -------- ------
6.0
UK 572 596 (4)% 615 531 16% 1,187 1,127 5% 94.9% 88.9% pp
0.6
Ireland 53 63 (15)% 48 38 26% 101 101 -% 89.7% 89.1% pp
(2.5)
Canada 606 601 1% 279 263 6% 885 864 2% 93.0% 95.5% pp
------------- ----- ----- ----- ----- ----- ---- --- ----- ----- ----- ----- ---- ------
Continuing 2.3
operations 1,231 1,260 (2)% 942 832 13% 2,173 2,092 4% 93.9% 91.6% pp
------------- ----- ----- ----- ----- ----- ---- --- ----- ----- ----- ----- ---- ------
Discontinued 13.5
operations 374 392 (5)% 108.7% 95.1% pp
------------- ----- ----- ---------- ----- ----- ---------- ----- ----- ----- ----- ---- ------
4.4
Total 2,547 2,484 3% 96.6% 92.2% pp
------------- ----- ----- ---------- ----- ----- ---------- ----- ----- ----- ----- ---- ------
1 References to sales represent present value of new business
premiums (PVNBP) which is an Alternative Performance Measure (APM)
and further information can be found in the 'Other information'
section of the 2021 interim results announcement.
2 Excludes Aviva Investors
3 Aviva Investors net flows excludes liquidity funds and
cash
Page 8
Analyst call
An analyst call will take place at 0900hrs GMT on 11 November
2021 and will be live-streamed via our website. A replay will be
available after the event. www.aviva.com
Upcoming events
We will be hosting the next of our Aviva In Focus sessions on 23
November 2021. The session will cover our UK Protection &
Health business. For further details please email IR@aviva.com.
Enquiries
Media:
Andrew Reid +44 (0)7800 694 276
Sarah Swailes +44 (0)7800 694 859
Analysts:
Rupert Taylor Rea +44 (0)7385 494 440
Tegan Gill +44 (0)7800 691 138
Michael O'Hara +44 (0)7837 234 388
Notes to editors
-- For information on how Aviva is helping our people, customers
and communities impacted by COVID-19 visit:
www.aviva.com/covid-19-our-response/
-- Throughout this trading update we use a range of financial
metrics to measure our performance and financial strength. These
metrics include Alternative Performance Measures (APMs), which are
non-GAAP measures that are not bound by the requirements of IFRS
and Solvency II. A complete list and further guidance in respect of
the APMs used by the Group can be found in the 'Other information'
section of the 2021 interim results announcement.
-- All figures have been translated at average exchange rates
applying for the period, with the exception of the capital position
which is translated at the closing rates on 30 September 2021. The
average rates employed in this announcement are 1 euro = GBP0.86
(Q3 2020: 1 euro = GBP0.88) and CAD$1 = GBP0.58 (Q3 2020: CAD$1 =
GBP0.58). Growth rates in this announcement have been provided in
sterling terms unless stated otherwise.
-- We exist to be with people when it really matters, throughout
their lives. We have been taking care of people for more than 320
years, in line with our purpose of being 'with you today, for a
better tomorrow'. In 2020, we paid GBP30.6 billion in claims and
benefits to our customers.
-- Aviva is invested in our people, our customers, our
communities and our planet. In 2021, we announced our plan to
become a Net Zero carbon emissions company by 2040, the first major
insurance company in the world to do so. This plan means Net Zero
carbon emissions from our investments by 2040; setting out a clear
pathway to get there with a cut of 25% in the carbon intensity of
our investments by 2025 and of 60% by 2030; and Net Zero carbon
emissions from our own operations and supply chain by 2030. Aviva
has been leading this agenda for decades: Aviva was the first
international insurer to go operationally carbon neutral in 2006
and we are champions of renewable energy and energy storage at our
offices, allowing us to achieve our 2030 carbon reduction target
(70% reduction on 2010 levels) 10 years early. Find out more about
our climate goals at www.aviva.com/climate-goals and our
sustainability ambition at www.aviva.com/sustainability .
-- Aviva is a Living Wage and Living Hours employer and provides
market-leading benefits for our people, including flexible working,
paid carers leave and equal parental leave. Find out more at
www.aviva.com/social-purpose
-- We are focused on the UK, Ireland and Canada where we have
leading market positions and significant potential. We will invest
for growth in these markets. We will also transform our performance
and improve our efficiency. Our transformation will be underpinned
by managing our balance sheet prudently, reducing debt and
increasing our financial resilience. We also have strategic
investments in Singapore, China and India.
Page 9
Cautionary statements
This document should be read in conjunction with the documents
distributed by Aviva plc (the 'Company' or 'Aviva') through The
Regulatory News Service (RNS). This announcement contains, and we
may make other verbal or written 'forward-looking statements' with
respect to certain of Aviva's plans and current goals and
expectations relating to future financial condition, performance,
results, strategic initiatives and objectives. Statements
containing the words 'believes', 'intends', 'expects', 'projects',
'plans', 'will', 'seeks', 'aims', 'may', 'could', 'outlook',
'likely', 'target', 'goal', 'guidance', 'trends', 'future',
'estimates', 'potential' and 'anticipates', and words of similar
meaning, are forward-looking. By their nature, all forward-looking
statements involve risk and uncertainty. Accordingly, there are or
will be important factors that could cause actual results to differ
materially from those indicated in these statements. Aviva believes
factors that could cause actual results to differ materially from
those indicated in forward-looking statements in the announcement
include, but are not limited to: the impact of ongoing uncertain
conditions in the global financial markets and the local and
international political and economic situation generally; market
developments and government actions (including those arising from
the evolving relationship between the UK and the EU); the effect of
credit spread volatility on the net unrealised value of the
investment portfolio; the effect of losses due to defaults by
counterparties, including potential sovereign debt defaults or
restructurings, on the value of our investments; changes in
interest rates that may cause policyholders to surrender their
contracts, reduce the value or yield of our investment portfolio
and impact our asset and liability matching; the unpredictable
consequences of reforms to reference rates, including LIBOR; the
impact of changes in short or long-term inflation; the impact of
changes in equity or property prices on our investment portfolio;
fluctuations in currency exchange rates; the effect of market
fluctuations on the value of options and guarantees embedded in
some of our life insurance products and the value of the assets
backing their reserves; the amount of allowances and impairments
taken on our investments; the effect of adverse capital and credit
market conditions on our ability to meet liquidity needs and our
access to capital; changes in, or restrictions on, our ability to
initiate capital management initiatives; changes in or inaccuracy
of assumptions in pricing and reserving for insurance business
(particularly with regard to mortality and morbidity trends, lapse
rates and policy renewal rates), longevity and endowments; a
cyclical downturn of the insurance industry; the impact of natural
and man-made catastrophic events (including the impact of Covid-19)
on our business activities and results of operations; the
transitional, litigation and physical risks associated with climate
change; our reliance on information and technology and third-party
service providers for our operations and systems; the impact of the
Group's risk mitigation strategies proving less effective than
anticipated, including the inability of reinsurers to meet
obligations or unavailability of reinsurance coverage; poor
investment performance of the Group's asset management business;
the withdrawal by customer's at short notice of assets under the
Group's management; failure to manage risks in operating securities
lending of Group and third-party client assets; increased
competition in the UK and in other countries where we have
significant operations; regulatory approval of changes to the
Group's internal model for calculation of regulatory capital under
the UK's version of Solvency II rules; the impact of actual
experience differing from estimates used in valuing and amortising
deferred acquisition costs (DAC) and acquired value of in-force
business (AVIF); the impact of recognising an impairment of our
goodwill or intangibles with indefinite lives; changes in valuation
methodologies, estimates and assumptions used in the valuation of
investment securities; the effect of legal proceedings and
regulatory investigations; the impact of operational risks,
including inadequate or failed internal and external processes,
systems and human error or from external events and malicious acts
(including cyber attack and theft, loss or misuse of customer
data); risks associated with arrangements with third parties,
including joint ventures; our reliance on third-party distribution
channels to deliver our products; funding risks associated with our
participation in defined benefit staff pension schemes; the failure
to attract or retain the necessary key personnel; the effect of
systems errors or regulatory changes on the calculation of unit
prices or deduction of charges for our unit-linked products that
may require retrospective compensation to our customers; the effect
of simplifying our operating structure and activities; the effect
of a decline in any of our ratings by rating agencies on our
standing among customers, broker-dealers, agents, wholesalers and
other distributors of our products and services; changes to our
brand and reputation; changes in tax laws and interpretation of
existing tax laws in jurisdictions where we conduct business;
changes to International Financial Reporting Standards relevant to
insurance companies and their interpretation (for example, IFRS
17); the inability to protect our intellectual property; the effect
of undisclosed liabilities, execution and separation issues and
other risks associated with our business disposals; and the
timing/regulatory approval impact and other uncertainties, such as
diversion of management attention and other resources, relating to
announced and future disposals and relating to future acquisitions,
combinations or disposals within relevant industries; the policies,
decisions and actions of government or regulatory authorities in
the UK, the EU, the US, Canada or elsewhere, including changes to
and the implementation of key legislation and
regulation. Please see Aviva's most recent Annual Report for
further details of risks, uncertainties and other factors relevant
to the business and its securities.
Aviva undertakes no obligation to update the forward looking
statements in this announcement or any other forward-looking
statements we may make. Forward-looking statements in this report
are current only as of the date on which such statements are
made.
This report has been prepared for, and only for, the members of
the Company, as a body, and no other persons. The Company, its
directors, employees, agents or advisers do not accept or assume
responsibility to any other person to who this document is shown or
into whose hands it may come, and any such responsibility or
liability is expressly disclaimed.
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END
TSTURUARARUAAUA
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