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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November 11, 2021 02:00 ET (07:00 GMT)

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