TIDMAV.
RNS Number : 4764V
Aviva PLC
10 August 2022
Page 1
News Release
10 August 2022
Aviva plc 2022 Interim Results Announcement
Continuing momentum with strong first half results demonstrating
benefits of diversified business model
Confident outlook for 2022 despite challenging market
backdrop
Further capital returns - anticipate launching share buyback
with our full year 2022 results
Solvency II Solvency II General insurance Operating 2022 interim
OFG(++) pro forma cover COR(++) profit(++,2) dividend
ratio(1)
GBP538m 213% 94.0% GBP829m 10.3p
+46% +27pp +2.4pp +14% +40%
HY21(3) : GBP369m 2021: 186% HY21(3) : 91.6% HY21(3) : GBP725m HY21: 7.35p
----------------- ---------------- ----------------- -----------------
Amanda Blanc, Group Chief Executive Officer, said:
"Sales are up, operating profit is higher, our financial
position is stronger. This has been an excellent six months for
Aviva.
Our scale and diversification give us resilience and
opportunity, enabling Aviva to withstand the challenging economic
climate. Our market leading positions and our unique ability to
look after a wide range of customers' needs are clear advantages
and have driven robust operating performance. Trading has been
encouraging across all our major businesses in insurance, wealth
and retirement.
Even so, we are very conscious of the pressures currently facing
many of our customers, especially the more vulnerable. In response
we have launched new, low cost, insurance products, and we are
increasing the range and amount of support we provide to
communities, businesses and our own people during this challenging
time.
Delivering for our shareholders is at the core of our strategy.
Our liquidity and capital position is extremely healthy and we are
declaring an interim dividend of 10.3p, in line with our full year
2022 dividend guidance of c.31.0p. We are increasingly confident in
Aviva's prospects and anticipate commencing additional returns of
capital to shareholders with our 2022 full year results."
Strong first half results demonstrating benefits of diversified
business model
-- Solvency II operating own funds generation(++) up 46% to
GBP538m (HY21(3) : GBP369m)
-- Operating profit(++,2) up 14% to GBP829m (HY21(3) :
GBP725m)
-- General insurance gross written premiums (GWP) up 6%(4) to
GBP4,694m (HY21(3) : GBP4,366m) with a strong 94.0% COR(++)
(HY21(3) : 91.6%)
-- UK & Ireland Life sales(5) up 4% to GBP16.8bn (HY21:
GBP16.2bn) with VNB(++) up 13% to GBP300m (HY21: GBP265m)
-- Solvency II return on equity(++) 10.9% (HY21(3,6) : 7.4%),
12.3% (HY21(3,6) : 8.8% ) excluding Heritage
-- Baseline controllable costs(++,7) down 2% to GBP1,342m
(HY21(3) : GBP1,372m) reflecting continued focus on efficiency
-- Cash remittances(++) of GBP798m (HY21(3) : GBP1,063m) in line
with our expectation and medium term target
-- IFRS loss after tax of GBP633m (HY21: GBP198m loss), largely
reflects adverse market movements, with no impact on capital or
cash remittances(++)
-- Interim dividend per share of 10.3p (HY21: 7.35p), up 40%, in
line with our dividend guidance for 2022
Capital position is strong - new share buyback anticipated with
full year 2022 results
-- Solvency II shareholder cover ratio(++) of 234% (2021: 244%)
and centre liquidity(++) (July 22) of GBP2.7bn (Feb 22:
GBP6.6bn)
-- Estimated Solvency II shareholder cover ratio pro forma(1)
for planned GBP1bn further debt reduction, pension scheme payment,
and the acquisition of Succession Wealth of 213%
-- Solvency II debt leverage ratio(++) of 30% (2021: 27%). We
expect this to return below 30% as we complete additional
deleveraging over time
-- Given our strong capital position and prospects, we
anticipate commencing a new share buyback programme with our 2022
full year results, subject to market conditions and regulatory
approval
-- Assuming a new buyback is agreed, its size will be determined
by the Board at year end and will take account of the financial
position at that time, as well as both the drivers of the capital
surplus (including the impact of market movements) and our
preference to return surplus capital regularly and sustainably
Footnotes are shown on page 2
Page 2
Continuing strong operating momentum into first half of 2022
-- Wealth showed resilience in challenging conditions with net
flows(++) of GBP5.0bn (HY21: GBP5.2bn). Workplace added 150,000 new
customers in the period, while our Advisor platform attracted the
2nd(8) highest net flows(++) in the market
-- Annuities & Equity release sales(5) up 12% to GBP2,762m
(HY21: GBP2,466m) and Solvency II operating OFG(++) up 18% to
GBP169m (HY21: GBP143m) driven by growth in BPAs and Equity
Release. Outlook remains positive with higher BPA volumes and
margins expected in H2
-- Protection & Health VNB(++) up 5% to GBP100m (HY21:
GBP95m) reflecting strong performance in Group Protection and
Health partly offset by higher interest rates which impacted
Individual Protection
-- UK & Ireland General Insurance GWP, up 5% to GBP2.8bn
(HY21: GBP2.7bn), and COR(++) of 95.6% (HY21: 93.6%). UK commercial
lines performed strongly with GWP up 12% while personal lines was
1% lower as we maintained pricing discipline to mitigate the impact
of claims inflation. We will continue to take the necessary actions
to price appropriately for the inflationary environment in the
second half
-- Canada GWP up 12% (6% at constant currency) to GBP1,854m
(HY21: GBP1,661m) and a COR(++) of 91.7% (HY21: 88.8%). We saw
excellent growth in both Commercial and Personal lines with GWP up
11% and 4% respectively at constant currency
-- Aviva Investors external net flows(++) recovered well in Q2
to GBP0.2bn in the first half (Q1 2022: GBP0.2bn net outflows),
however remain lower than the prior year (HY21: GBP1.1 billion)
given the volatile market conditions in the first half of 2022
-- International investments operating profit(++,2) flat at
GBP55m with sales(5) 8% lower due to lockdowns in China
Group financial performance Group financial strength
------------------------------------------------------------ ----------------------------------------
General Insurance Life new business IFRS loss for Solvency II Centre liquidity(++)
GWP sales(5) the period shareholder
cover ratio(++)
GBP4.7bn GBP17.4bn GBP(633)m 234% GBP2.7bn
+6%(4) +3% (219)% (10)pp GBP(3.9)bn
HY21(3) : GBP4.4bn HY21(3) : GBP16.9bn HY21: GBP(198)m FY21: 244% Feb 22: GBP6.6bn
------------------ ------------------- --------------- ----------------
Outlook
Our strong first half results reinforce our confidence in the
prospects and outlook for our business, as our strategy to
transform performance continues to build momentum. While
recognising the challenging economic backdrop, we remain well
positioned to drive growth and meet our Group targets.
In UK & Ireland Life we expect to see continued growth. We
anticipate higher BPA volumes in the second half as well as
improving margins. In Wealth and Protection & Health we expect
a continuation of first half trends for the remainder of the year.
We also expect the completion of our acquisition of Succession
Wealth during the second half.
In General Insurance, we expect the rating environment to remain
favourable in commercial lines, while in personal lines we will
continue to price appropriately to manage inflation.
We remain firmly focused on improving efficiency and are on
track to meet the first stage of our cost target to reduce baseline
controllable costs(++,7) by GBP300m (net of inflation) over
2018-22. We are continuing to execute the actions necessary to
deliver the upgraded target we set out in March to reduce costs by
GBP750m (gross of inflation) by 2024.
Cash remittances(++) remain on track to meet our target of
>GBP5.4bn cumulative (2022-24). Solvency II operating own funds
generation(++) also on track to meet our target of GBP1.5bn per
annum by 2024.
++ Denotes Alternative Performance Measures (APMs) and further
information can be found in the 'Other information' section | 1
Solvency II pro forma cover ratio is the estimated Solvency II
shareholder cover ratio at 30 June 2022 adjusted for GBP1bn further
debt reduction, pension scheme payment and acquisition of
Succession Wealth | 2 Operating profit represents Group adjusted
operating profit which is a non-GAAP APM. Operating profit is not
bound by the requirements of IFRS. Further details are included in
the 'Other information' section | 3 Comparatives presented are from
continuing operations | 4 Constant currency | 5 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 | 6 Following a
review of the basis of preparation of Group Solvency II Return on
Equity comparative for the six months ended 30 June 2021 has been
restated. See section '4.ii - Solvency II return on capital/equity'
for details | 7 Baseline controllable costs exclude strategic
investment, cost reduction implementation, IFRS 17 and other costs
not included in the 2018 costs savings target baseline | 8 Latest
data available as at Q1 2022 (Fundscape)
Page 3
Chief Executive's Overview
Overview
I'm pleased to report Aviva has had an excellent first half of
2022 despite the challenging environment.
Our strong first half performance is a timely reminder of the
benefits of Aviva's diversified, high quality and focused business
model and mix. This provides in-built resilience and opportunity
for the Group, allowing us to withstand difficult market
conditions. The Group is now focused on growing in those areas
where it has market leading positions and expertise, and where it
can generate attractive returns. Aviva is well balanced across its
insurance, wealth and retirement propositions in the UK, Ireland
and Canada.
Strong first half results
Profitability improved across the Group during the first half.
We are building clear momentum in our operating performance and we
have made progress against the financial targets we set out in
March.
Solvency II operating own funds generation (OFG), an important
measure of value creation at Aviva and one of our key targets, was
up 46% to GBP538 million (HY21: GBP369 million). We saw improved
volumes and margins in Bulk Purchase Annuities (BPAs), further
performance improvement in UK GI Commercial lines together with
increased GI investment returns, as well as lower Group interest
costs following our debt reduction actions.
Group adjusted operating profit(1) was also up, by 14%, to
GBP829 million.
Cash remittances to the Group centre of GBP798 million in the
first half were in line with our target for over GBP5.4 billion of
gross cash remittances over 2022-24, and this supported a strong
centre liquidity position of GBP2.7 billion as at end July.
In UK & Ireland Life we delivered robust sales(2) growth of
4% to GBP16.8 billion, with volumes in Annuities & Equity
Release up 12% and in Health & Protection up 6%. In our Wealth
business net flows of GBP5.0 billion represented 7%(3) of opening
assets under management, although were lower than last year due to
the challenging market conditions. UK&I Life value of new
business (VNB), a key measure of the profitability of new business,
was up 13% to GBP300 million, driven by a 50% increase in Annuities
& Equity Release as BPA margins improved versus the first half
of last year.
Trading momentum in General Insurance continued in the first
half, and we saw gross written premiums of GBP4.7 billion, an
increase of 6% at constant currency . Commercial Lines delivered
double digit premium growth with strong new business, rate
increases and high retention levels. Personal Lines premiums were
up 1% at constant currency, with UK Personal Lines down 1%
reflecting our resolute focus on returns in a difficult market. The
Group combined operating ratio (COR) was an excellent 94.0%
demonstrating our underwriting discipline and tight management of
claims inflation, with the 2.4pp increase versus the first half of
2021 reflecting a return to more normal claims frequency and
weather patterns.
External net flows in Aviva Investors recovered well in Q2 to
GBP0.2 billion in the first half (Q122: GBP0.2 billion net
outflows), however remain lower than the prior year (HY21: GBP1.1
billion) given the volatile market conditions in the first half of
2022. Overall, Aviva Investors saw total net outflows of GBP4.3
billion in the period reflecting expected outflows from internal
assets, mainly Heritage, and withdrawals by clients previously part
of the Group, mainly in France.
Our focus on cost efficiency continues. First half baseline
controllable costs(4) fell 2% to GBP1.3 billion as we maintained
our cost discipline despite the inflationary environment. We remain
on track to meet our GBP300 million (net of inflation) cost
reduction ambition by the end of this year. We are also very
focused on delivering our GBP750 million (gross of inflation)
ambition by 2024, although offsetting inflationary pressures will
determine how much falls through to the bottom line.
Finally, our balance sheet is strong. On a pro forma basis(5) ,
our Solvency II shareholder cover ratio was 213% at 30 June 2022
(with a headline Solvency II shareholder cover ratio of 234%),
benefitting from operating capital generation in the period as well
as positive market movements. Our asset portfolio is well
positioned with diversification across asset classes, strong credit
ratings, and low loan-to-value ratios in our commercial mortgage
portfolio.
Interim dividend and commitment to further capital returns
The Board of Directors has declared an interim dividend of 10.3
pence per share, up 40% (HY21: 7.35 pence), with a cost of c.GBP289
million (HY21: GBP286 million). This is consistent with our full
year 2022 dividend guidance of c.31.0 pence(6) (approximately
GBP870 million).
Given our strong capital position and prospects, we anticipate
commencing a new share buyback programme with the 2022 full year
results, subject to market conditions and regulatory approval.
Assuming a new buyback is agreed, its size will be determined by
the Board at year end and will take account of the financial
position at that time, as well as both the drivers of the capital
surplus (including the impact of market movements) and our
preference to return surplus capital regularly and sustainably.
Delivering Aviva's Promise
We aim to be a leading player in every major segment where we
operate. Where we are already number one, we plan to build further
on that position. Where we are not, we are pushing hard to get
there. We're focusing on four areas to make that a reality:
Customer: delivering leading customer experience and engagement.
Aviva already has the benefit of being the no.1 insurance customer
franchise in the UK. But we're aiming to go further, by enhancing
our digital capability to provide customers with a simpler, more
personalised offering, with the products they need, when and how
they need them. Our aim is to look after more customers and more of
their needs so that they stay with us for longer.
1 Operating profit represents Group adjusted operating profit
which is a non-GAAP APM. Operating profit is not bound by the
requirements of IFRS. Further details are included in the 'Other
information' section | 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 | 3 Net flows annualised as a
percentage of opening assets under management | 4 Baseline
controllable costs exclude strategic investment, cost reduction
implementation, IFRS 17 and other costs not included in the 2018
costs savings target baseline | 5 Solvency II pro forma shareholder
cover ratio is the estimated Solvency II shareholder cover ratio at
30 June 2022 adjusted for GBP1 billion further debt reduction,
pension scheme payment and acquisition of Succession Wealth | 6 The
Board has not approved or made any decision to pay any dividend in
respect of any future period
Page 4
We've been there for our customers during the first half. In
February the UK suffered three storms in a single week. We received
over 19,000 claims, so colleagues from across the business,
including in Canada, helped to process them in good time, settling
10% of claims on the day of notification. That's One Aviva in
action, making a real difference for our customers.
Growth : continued targeted growth in our priority areas across
the Group. We have great capabilities, partnerships, and market
positions, and we're ideally equipped to capitalise on big customer
trends.
In the first half we saw continued excellent growth across the
Group, including in our General Insurance businesses, in Protection
& Health and in Annuities & Equity Release. In Wealth,
where market conditions have been challenging, net flows have
remained strong. We're expanding revenue streams too, where there
are the right opportunities. For example Aviva Zero, our digital
motor insurer in the UK with in-built carbon offset feature, which
launched earlier this year, has now sold over 10,000 policies. Also
in the UK, we have just announced the acquisition of a high net
worth business from Azur, which will move us to number one in that
segment.
Efficiency: we are targeting top quartile efficiency and cost
reduction. That means reducing the number of old systems and
products, making it easier for customers and brokers to deal with
us, automating processes, and reducing our property footprint. Our
baseline controllable costs fell 2% in the first half despite the
inflationary pressures, demonstrating our firm grip on Aviva's cost
base.
Sustainability: continuing to lead the UK financial services
sector on sustainability and living up to our responsibilities to
people and the planet, changing the way we do business and using
our influence to help others do the same.
In May, our Sustainalytics ESG risk rating improved to 11.3, now
ranking Aviva 5th(1) out of 288 global insurers (up from 25th) and
ahead of all UK Financial Services peers. Importantly, we've been
supporting our colleagues, customers, and communities in the face
of economic pressures and the cost-of-living crisis. We have made
financial commitments to communities to provide advice and support
to vulnerable people and businesses, continued to provide
affordable but robust products and premium deferral options, and we
are making a one-off payment to help 7,000 of our colleagues.
Summary
Overall, Aviva is in excellent health and our strategy is
delivering results. We enter the second half of 2022 with
confidence and while we remain mindful of market and macro-economic
challenges, we are on track to meet all of our financial targets.
There is still much to do, but we expect to make continued good
progress to deliver Aviva's promise for our customers and
shareholders.
Amanda Blanc
Group Chief Executive Officer
9 August 2022
Other operating highlights
UK & Ireland
Life * Wealth - strong net flows of GBP5 billion (HY21:
GBP5.2 billion), pleasing performance in challenging
markets
* Workplace pensions - 150,000 net new customers. AUM
8% lower at GBP88.5 billion reflecting impact of
lower equities
* Adviser platform - #2(2) by net flows in the adviser
platform market with net flows GBP2.4 billion. Total
platform AUM 7% lower at GBP40.3 billion (2021:
GBP43.1 billion)
* Annuities - BPA sales(3) of GBP1.9 billion (HY21:
GBP1.6 billion), including GBP0.8 billion of Aviva
staff pension scheme
* Equity release - sales(3) up 27% amid heightened
market activity and introduction of a new proposition
* Group protection - sales(3) up 31% reflecting
excellent retention and new scheme wins
* Ireland Life - margin improvement with VNB up to
GBP16 million (HY21: GBP10 million) driven by
rationalised product offering
--------------- ------------------------------------------------------------
General
Insurance * UK commercial lines GWP up 12% to GBP1,430 million
(HY21: GBP1,280 million)
* UK personal lines GWP 1% lower to GBP1,198 million
(HY21: GBP1,213 million) as we took actions to
maintain pricing discipline
* Canada commercial lines GWP up 17% to GBP716 million
(HY21: GBP614 million), up 11% in constant currency
* Canada personal lines GWP up 9% to GBP1,138 million
(HY21: GBP1,047 million), up 4% in constant currency
--------------- ------------------------------------------------------------
Aviva Investors
* First phase of the transition to a new scalable real
assets operating model with loan servicing
successfully outsourced to Mount Street
--------------- ------------------------------------------------------------
1 As at 9 August 2022 | 2 Latest data available as at Q1 2022
(Fundscape) | 3 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
Page 5
Full
6 months 6 months Sterling year
2022 2021 % 2021
Cash remittances(++,R) and Centre liquidity(++) GBPm GBPm change GBPm
------------------------------------------------ -------- -------- -------- -----
UK, Ireland, Canada and Aviva Investors 779 1,052 (26)% 1,651
International investments(1) 19 11 73% 11
------------------------------------------------ -------- -------- -------- -----
Cash remittances(++) from continuing operations 798 1,063 (25)% 1,662
Centre liquidity(++) as at end of July/February 2,735 2,817 (3)% 6,644
------------------------------------------------ -------- -------- -------- -----
Full
6 months 6 months Sterling year
2022 2021 % 2021
Profit GBPm GBPm change GBPm
--------------------------------------------------- -------- -------- -------- -----
UK, Ireland, Canada and Aviva Investors 1,040 984 6% 2,231
International investments(1) 55 55 -% 97
Corporate centre costs and Other operations (138) (134) (3)% (379)
Group debt costs and other interest (128) (180) 29% (315)
--------------------------------------------------- -------- -------- -------- -----
Adjusted operating profit(++,R) from continuing
operations(2) 829 725 14% 1,634
IFRS (loss)/profit for the period(3) (633) (198) (219)% 2,036
Operating earnings per share (as reported)(4,++,R) 19.0p 21.0p (10)% 43.8p
Operating earnings per share (normalised)(4,5,++) 23.5p N/A N/A N/A
Basic earnings per share (18.8)p (6.2)p (203)% 50.1p
--------------------------------------------------- -------- -------- -------- -----
Full
6 months 6 months Sterling year
2022 2021 % 2021
Controllable costs(++) GBPm GBPm change GBPm
UK, Ireland, Canada and Aviva Investors 1,227 1,259 (3)% 2,559
Corporate centre costs and Other operations 115 113 2% 295
-------------------------------------------------- -------- -------- -------- -----
Baseline controllable costs(6) 1,342 1,372 (2)% 2,854
Cost reduction implementation, IFRS 17 costs
and other 103 75 37% 242
Strategic investment 34 - -% -
-------------------------------------------------- -------- -------- -------- -----
Controllable costs(++) from continuing operations 1,479 1,447 2% 3,096
-------------------------------------------------- -------- -------- -------- -----
Solvency II operating own funds Solvency II operating Solvency II operating
generation (OFG)(++,R) and Solvency own funds generation capital generation
II operating capital generation
(OCG)(++)
---------------------------------------- ----------------------------------- -----------------------------------
Full Full
6 months 6 months Sterling year 6 months 6 months Sterling year
2022 2021 % 2021 2022 2021 % 2021
GBPm GBPm change GBPm GBPm GBPm change GBPm
---------------------------------------- -------- -------- -------- ----- -------- -------- -------- -----
UK, Ireland, Canada and Aviva Investors 709 550 29% 1,660 722 841 (14)% 1,906
International investments(1) 75 84 (11)% 124 33 37 (11)% 55
Corporate centre costs, Group external
debt costs and Other (246) (265) 7% (597) (199) (484) 59% (597)
---------------------------------------- -------- -------- -------- ----- -------- -------- -------- -----
Group Solvency II operating own
funds generation(++) and Solvency
II operating capital generation(++)
from continuing operations 538 369 46% 1,187 556 394 41% 1,364
---------------------------------------- -------- -------- -------- ----- -------- -------- -------- -----
Restated
Full
6 months 6 months year
2022 2021(7) 2021
Solvency II return on capital/equity(++,R) % % Change %
-------------------------------------------- -------- --------- ------- -----
Solvency II return on capital
UK, Ireland, Canada and Aviva Investors 8.0% 6.1% 1.9pp 8.8%
International investments(1) 15.3% 18.5% (3.2)pp 13.6%
Group Solvency II return on equity(++) from
continuing operations 10.9% 7.4% 3.5pp 10.7%
-------------------------------------------- -------- --------- ------- -----
30 June 31 December 30 June
Capital position 2022 2021 Change 2021
---------------------------------------------------- --------- ----------- ------ ---------
Estimated Solvency II shareholder cover ratio(++,R) 234% 244% (10)pp 203%
Estimated Solvency II surplus GBP10.3bn GBP13.1bn (21)% GBP12.0bn
Solvency II net asset value per share(++) 420p 417p 3p 433p
Solvency II debt leverage ratio(++) 30% 27% 3pp 26%
---------------------------------------------------- --------- ----------- ------ ---------
Full
Sterling year
6 months 6 months % 2021
Dividend 2022 2021 change GBPm
--------------------------- -------- -------- -------- -----
Interim dividend per share 10.3p 7.35p 40% 7.35p
--------------------------- -------- -------- -------- -----
R Symbol denotes key performance indicators used as a base to
determine or modify remuneration | ++ Denotes Alternative
Performance Measures (APMs) and further information can be found in
the 'Other information' section |1 International investments
include Aviva's interest in joint ventures/associates in Singapore,
India and China | 2 Group adjusted operating profit is a non-GAAP
APM and is not bound by the requirements of IFRS. Further details
of this measure are included in the 'Other information' section. |
3 IFRS (loss)/profit for the period represents IFRS (loss)/profit
after tax | 4 Operating earnings per share is derived from the
Group adjusted operating profit APM. Further details of this
measure are included in the 'Other information' section. | 5
Normalised EPS is calculated as if the share consolidation
completed on 16 May 2022 as part of the GBP3.75 billion capital
return, had taken place on 1 January 2022 | 6 Baseline controllable
costs exclude strategic investment, cost reduction implementation,
IFRS 17 and other costs not included in the 2018 costs savings
target baseline
| 7 Following a review of the basis of preparation of Group
Solvency II Return on Equity and Market Solvency II Return on
Capital, comparative amounts for the six months ended 30 June 2021
have been restated. In the numerator, Transitional Measure on
Technical Provisions (TMTP) run-off has been replaced with the
economic cost of holding equivalent capital to the opening value of
TMTP on a shareholder basis and, for Group Solvency II Return on
Equity only, the denominator has been adjusted to exclude excess
capital above our target Solvency II shareholder cover ratio.
Further details can be found in the 'Other information'
section.
Page 6
Group financial headlines
Operating results
Cash remittances
Cash remittances during the first half of 2022 were GBP0.8
billion (HY21(1) : GBP1.1 billion), in line with our existing
target to grow remittances towards GBP1.8 billion in 2023. Strong
remittances in the prior period arose from the decision to retain
cash in our subsidiaries in 2020 to maintain balance sheet strength
following volatility arising from COVID-19.
Profit
Operating profit(2) increased by 14% to GBP829 million (HY21(1)
: GBP725 million). Excluding UK Life management actions and other
of GBP(71) million (HY21: GBP(38) million), operating profit(2) was
up 18% to GBP900 million (HY21: GBP763 million).
UK & Ireland Life operating profit(2) benefitted from strong
results in Annuities & Equity Release which more than offset
marginally lower operating profit(2) in Wealth, as well as lower
operating profit(2) from Protection & Health and management
actions and other compared with the first half of 2021. Heritage
operating profit(2) increased by 33% due to the impact of market
movements on policyholder tax. Excluding management actions and
other, UK Life operating profit(2) was up 19% to GBP696 million
(HY21: GBP583 million).
General Insurance performed robustly against a challenging
market backdrop, with operating profit(2) down 11% predominantly
driven by claims returning to a more normal level following a
strong prior period which included COVID-19 frequency benefit.
Operating earnings per share of 19.0 pence (HY21: 21.0 pence)
with the impact of disposals partly offset by higher operating
profit(2) from continuing operations and a lower share count.
Operating earnings per share on a normalised basis was 23.5
pence.
IFRS loss for the period was GBP(633) million (HY21: GBP(198)
million) while basic earnings per share decreased to (18.8) pence
(HY21: (6.2) pence). Higher operating profit(2) was more than
offset by non-operating items including economic variances of
GBP(1,470) million (HY21: GBP(437) million), with higher interest
rates and widening spreads resulting in an adverse economic
variance impact.
Cost reduction
Baseline controllable costs(3) from continuing operations, fell
by 2% to GBP1,342 million (HY21(1) : GBP1,372 million), despite
headwinds from inflation. We are on track to meet our ambition of a
GBP300 million reduction (net of inflation) in 2022 and to meet our
target of GBP750 million (gross of inflation) cost reduction from
the 2018 baseline by the end of 2024.
Solvency II operating own funds generation (Solvency II OFG)
Solvency II OFG from continuing operations increased by 46% to
GBP538 million (HY21(1) : GBP369 million) with higher Solvency II
OFG from Annuities & Equity Release, Management Actions &
Other and UK GI partially offset by lower Solvency II OFG from
Protection & Health and Canada.
Solvency II operating capital generation (Solvency II OCG)
Solvency II OCG from continuing operations increased by 41% to
GBP556 million (HY21(1) : GBP394 million) as the prior year was
adversely impacted by capital actions and other non-recurring items
which have not repeated in the first half of 2022. This has been
partially offset by lower Solvency II OCG from core business
units.
Solvency II return on equity (Solvency II RoE)
Solvency II RoE was 10.9%, improving by 3.5pp (HY21 restated:
7.4%). Our ambition remains for Solvency II RoE on a continuing
basis to improve to >12% by 2024. The Solvency II RoE was 12.3%
excluding Heritage, which acts as a drag to the headline Solvency
II RoE given it is in run-off.
1 Comparatives presented are from continuing operations | 2
Operating profit represents Group adjusted operating profit which
is a non-GAAP APM. Operating profit is not bound by the
requirements of IFRS. Further details are included in the 'Other
information' section. | 3 Baseline controllable costs exclude
strategic investment, cost reduction implementation, IFRS 17 and
other costs not included in the 2018 costs savings target
baseline
Page 7
Capital and cash
Solvency II capital
At 30 June 2022, Aviva's Solvency II shareholder surplus was
GBP10.3 billion and Solvency II shareholder cover ratio was
234%
(FY21: GBP13.1 billion and 244% respectively). Our pro forma
Solvency II cover ratio allowing for the planned GBP1 billion
further debt reduction, GBP0.1 billion pension scheme payment, and
the acquisition of Succession Wealth, is estimated at 213%.
The solvency capital requirement of GBP7.7 billion includes a
c.GBP1.9 billion benefit from Group diversification.
Solvency II net asset value per share was 420 pence (FY21: 417
pence).
Pro Pro forma
Pro forma 31 December 30 June forma(1) 30 June
GBPbn unless otherwise stated 2021 2022 adjustments 2022
------------------------------------------- ----------- ------- ------------ ---------
Own funds 22.2 18.0 (1.6) 16.4
SCR (9.1) (7.7) (7.7)
------------------------------------------- ----------- ------- ------------ ---------
Surplus 13.1 10.3 (1.6) 8.7
------------------------------------------- ----------- ------- ------------ ---------
Solvency II shareholder cover ratio (%) 244% 234% (21)% 213%
------------------------------------------- ----------- ------- ------------ ---------
Centre liquidity (as at end February/July) 6.6 2.7 1.3
------------------------------------------- ----------- ------- ------------ ---------
Solvency II debt leverage ratio 27% 30% 28%
------------------------------------------- ----------- ------- ------------ ---------
Centre liquidity
At end July 2022, centre liquidity was GBP2.7 billion (February
2022: GBP6.6 billion) with the reduction primarily driven by the
GBP3.75 billion capital return, GBP0.5 billion subordinated debt
redemption and GBP0.5 billion payment of the 2021 final dividend,
partly offset by cash remittances to Group of GBP0.8 billion and
the GBP0.5 billion RT1 debt issuance. Our pro forma centre
liquidity is GBP1.3 billion after allowing for the planned further
GBP1 billion debt reduction, GBP0.1 billion pension payment, and
the acquisition of Succession Wealth.
Solvency II debt leverage
Solvency II debt leverage ratio increased to 30% (FY21: 27%) as
a result of the reduction in own funds following the capital
return. Our
pro forma Solvency II debt leverage ratio is 28% after allowing
for the planned GBP1 billion debt reduction, GBP0.1 billion pension
payment and the acquisition of Succession Wealth.
Dividend
Today we have announced an interim dividend per share for the
first half of 2022 of 10.3 pence (HY21: 7.35 pence) with a cash
cost of approximately GBP289 million.
Our guidance for dividend payments of approximately GBP870
million and GBP915 million for 2022 and 2023 respectively, with
low-to-mid single growth in dividends per share thereafter, remains
unchanged. On a per share basis this is equivalent to approximately
31.0 pence(2) in 2022 and 32.5 pence(2) in 2023.
Capital return
Under our capital framework, we consider capital above 180%
Solvency II shareholder cover ratio as excess, allowing for
reinvestment in the business, focused M&A and returns to
shareholders. We target Solvency II debt leverage ratio of below
30%.
Given our strong capital position and prospects, we anticipate
commencing a new share buyback program with our 2022 full year
results, subject to market conditions and regulatory approval.
Assuming a new buyback is agreed, its size will be determined by
the Board at year end and will take account of the financial
position at that time, as well as both the drivers of the capital
surplus (including the impact of market movements) and our
preference to return surplus capital regularly and sustainably.
1 Solvency II pro forma shareholder cover ratio is the estimated
Solvency II shareholder cover ratio at 30 June 2022 adjusted for
GBP1 billion further debt reduction, pension scheme payment and
acquisition of Succession Wealth | 2 The Board has not approved or
made any decision to pay any dividend in respect of any future
period
Page 8
Business highlights
UK & Ireland Life
Full
6 months 6 months Sterling year
2022 2021 % 2021
Operating profit GBPm GBPm change GBPm
--------------------------- -------- -------- -------- -----
Wealth 71 73 (3)% 147
Annuities & Equity Release 346 265 31% 645
Protection & Health 95 107 (11)% 229
Heritage 184 138 33% 319
Other(1) (71) (38) (87)% 77
Ireland Life 26 - -% 11
--------------------------- -------- -------- -------- -----
Total 651 545 19% 1,428
--------------------------- -------- -------- -------- -----
UK and Ireland Life operating profit(2) was 19% higher at GBP651
million (HY21: GBP545 million) with a strong performance in
Annuities & Equity Release and increased Heritage operating
profit(2) more than offsetting a reduction in management actions
and other non-operating items compared to the first half of 2021.
Annuities & Equity Release operating profit(2) increased 31% to
GBP346 million (HY21: GBP265 million), driven by sales(3) of bulk
purchase annuities, which increased by 15% to GBP1.9 billion (HY21:
GBP1.6 billion), and improved margins. Heritage operating profit(2)
increased by 33% to GBP184 million (HY21: GBP138 million) due to
the impact of market movements on policyholder tax. The operating
loss(2) within Other of GBP(71) million (HY21: GBP(38) million)
reflects a reduction in the carrying value of deferred acquisition
costs as a result of market movements.
Wealth operating profit(2) was 3% lower at GBP71 million (HY21:
GBP73 million). In Protection & Health, operating profit(2)
decreased by
11% to GBP95 million (HY21: GBP107 million), primarily driven by
the absence of favourable claims experience in the first half of
2022.
Ireland Life operating profit(2) improved significantly to GBP26
million (HY21: GBPnil) driven by reduced expenses, improved
underlying performance and modelling improvements.
UK & Ireland Life Solvency II OFG of GBP328 million (HY21:
GBP217 million) was up 51% and up 14% excluding Other. Annuities
& Equity Release Solvency II OFG of GBP169 million (2020:
GBP143 million) was up 18% driven by higher volumes and improved
margins reflecting the higher availability and allocation of
corporate bonds and illiquid assets. Wealth Solvency II OFG was up
10% reflecting higher average AUM. Protection & Health was down
27% to GBP56 million (HY21: GBP77 million) driven by lower volumes
of individual protection and the non-recurrence of favourable
claims experience.
PVNBP VNB
---------------------------- ----------------------------
6 months 6 months Sterling 6 months 6 months Sterling
2022 2021 % 2022 2021 %
New business GBPm GBPm change GBPm GBPm change
----------------------------- -------- -------- -------- -------- -------- --------
Wealth(4) 11,896 11,699 2% 109 110 (1)%
Annuities and Equity Release 2,762 2,466 12% 75 50 50%
Protection & Health 1,327 1,255 6% 100 95 5%
Ireland Life 858 820 5% 16 10 53%
----------------------------- -------- -------- -------- -------- -------- --------
UK & Ireland Life total 16,843 16,240 4% 300 265 13%
----------------------------- -------- -------- -------- -------- -------- --------
Wealth sales(3,4) grew 2% driven by growth in Workplace,
predominantly reflecting incremental growth from the in-force book,
which more than offset new business volumes which were lower as the
prior year comparator benefitted from significant scheme wins that
were delayed from 2020. The growth in Workplace was partly offset
by reduced sales(3) from our adviser platform due to a combination
of lower new business flows, reflecting current market volatility
which has dampened investment activity, and a strong first half in
2021 which saw the benefit from pent up demand from savings
accumulated in 2020. VNB reduced by 1% from the resultant change in
business mix with a higher proportion of Workplace sales(3) .
Our Wealth new business is capital efficient, with profits being
derived from asset management fees less costs. We have a
competitive position in both workplace and retail markets, which
have delivered diversified and resilient earnings and highly
efficient customer acquisition into the Group.
Annuities & Equity Release sales(3) were 12% higher, driven
by BPA sales(3) of GBP1.9 billion (HY21: GBP1.6 billion), despite a
relatively subdued first half where we have maintained pricing
discipline, and a strong start to the year in equity release with
sales(3) up 27% on prior period, reflecting high levels of market
activity. This more than offset lower sales(3) from individual
annuities where volumes were down on internal individual annuities,
despite strong growth in external volumes. VNB for Annuities &
Equity Release was up 50% to GBP75 million
(HY21: GBP50 million) predominantly driven by increased BPA
sales(3) at improved margins from a reduced lag in sourcing higher
yielding illiquid assets to back the liabilities.
Protection & Health VNB was up 5% driven by increased
sales(3) , up by 6%. Growth in Health and Group Protection was
partially offset by a more subdued Individual Protection market due
to lower volumes, as the first half of 2021 benefitted from stamp
duty relief, coupled with higher interest rates have adversely
impacted sales(3) . Our Group Protection business saw a 31%
increase in sales(3) which included a significant scheme win in the
first quarter while Health volumes grew 8% as we saw continued
momentum from the Expert Select proposition launched last year.
Ireland Life PVNBP grew 5% driven by strong sales(3) in unit
linked business, partially offset by lower protection sales(3) .
Our single product range has improved margins and driven VNB up
significantly over the year.
1 UK Life Other represents changes in assumptions and modelling,
non-recurring items and non-product specific overheads | 2
Operating profit represents Group adjusted operating profit which
is a non-GAAP APM. Operating profit is not bound by the
requirements of IFRS. Further details are included in the 'Other
information' section. | 3 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 | 4 Wealth and Other
Page 9
Net flows Assets under management
---------------------------- -----------------------------------
Full
6 months 6 months Sterling 30 June 30 June Sterling year
2022 2021 % 2022 2021 % 2021
GBPm GBPm change GBPm GBPm change GBPm
-------------------------------- -------- -------- -------- ------- ------- -------- -------
Wealth 4,962 5,173 (4)% 140,425 141,234 (1)% 152,207
of which: platform 2,547 2,834 (10)% 40,280 39,012 3% 43,101
of which: workplace 2,699 2,697 -% 88,463 89,154 (1)% 95,798
of which: individual pensions (284) (358) 21% 11,682 13,068 (11)% 13,308
================================ ======== ======== ======== ======= ======= ======== =======
Wealth net flows were down 4% to GBP5.0 billion (HY21: GBP5.2
billion), reflecting lower flows due to the current market
uncertainty. Within our platform business, our adviser platform saw
net flows down 9% to GBP2.4 billion (HY21: 2.7 billion) driven by
subdued new business activity owing to market volatility. Workplace
net flows were flat at GBP2.7 billion despite lower new business as
the prior year benefitted from schemes that were delayed from
2020.
Wealth assets under management reduced by 8% to GBP140 billion
during the first six months (2021: GBP152 billion) due to adverse
market movements.
General Insurance
Full
6 months 6 months Sterling year
2022 2021 % 2021
Operating profit GBPm GBPm change GBPm
------------------------ -------- -------- -------- -----
UK 159 169 (6)% 318
Ireland 12 22 (45)% 38
Canada 204 229 (11)% 406
------------------------ -------- -------- -------- -----
General Insurance Total 375 420 (11)% 762
------------------------ -------- -------- -------- -----
Operating profit(1) decreased to GBP375 million (HY21: GBP420
million), a good performance despite higher claim costs, as the
level of claims returned to a more normal level following lower
claim frequency from COVID-19 restrictions in the prior year, and
less favourable weather compared with the first half of 2021. This
was partially offset by volume growth and an improvement in
long-term investment return due to higher yields from reinvestment
in hedged equities and corporate bonds.
General Insurance Solvency II OFG of GBP367 million (HY21:
GBP315 million) was up 17% in the first half. UK & Ireland GI
Solvency II OFG of
GBP193 million (HY21: GBP121 million) was up 60% driven by a
strong performance in commercial lines and a higher long-term
investment return due to re-risking. In Canada, Solvency II OFG of
GBP174 million (HY21: GBP194 million) was down 10% due to less
favourable weather and
non-recurrence of COVID-19 frequency benefits.
GWP COR
-------- -------- -------- -------- -------- -------- -------- -------- -------- ----- -------- -------- -------- -----
Personal lines Commercial lines Total Total
---------------------------- ---------------------------- -------- -------- -------- ----- -------- -------- -------- -----
Full Full
6 months 6 months Sterling 6 months 6 months Sterling 6 months 6 months Sterling year 6 months 6 months Sterling year
2022 2021 % 2022 2021 % 2022 2021 % 2021 2022 2021 % 2021
GBPm GBPm change GBPm GBPm change GBPm GBPm change GBPm % % change %
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------- ----- -------- -------- -------- -----
UK 1,198 1,213 (1)% 1,430 1,280 12% 2,628 2,493 5% 4,943 95.6% 93.9% 1.7pp 94.6%
Ireland 93 105 (11)% 119 107 11% 212 212 -% 409 96.2% 89.9% 6.3pp 91.7%
Canada 1,138 1,047 9% 716 614 17% 1,854 1,661 12% 3,455 91.7% 88.8% 2.9pp 90.7%
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------- ----- -------- -------- -------- -----
Total 2,429 2,365 3% 2,265 2,001 13% 4,694 4,366 8% 8,807 94.0% 91.6% 2.4pp 92.9%
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------- ----- -------- -------- -------- -----
UK, Ireland and Canada COR increased to 94.0% from 91.6%. UK COR
increased by 1.7pp to 95.6% (HY21: 93.9%) following a return to
more normal claims frequency together with higher UK weather costs
relative to a benign 2021 weather experience, partly offset by
improvements in underwriting performance from commercial lines
supported by strong rate momentum. Canada COR deteriorated 2.9pp to
91.7%
(HY21: 88.8%) due to increased claims costs, as the prior year
result benefitted from higher COVID-19 frequency benefits and
benign weather, partly offset by lower commission and favourable
prior year development compared to the first half of last year.
Total GWP across UK, Ireland and Canada grew 8% (6% in constant
currency) to GBP4.7 billion (HY21: GBP4.4 billion), including 5%
growth in the UK and 12% in Canada (6% in constant currency).
Ireland was flat on the prior year.
UK commercial lines GWP grew 12% to GBP1,430 million (HY21:
GBP1,280 million), reflecting a favourable rating environment, high
retention levels and strong new business growth, benefiting from
our investment in underwriting talent and strong broker
relationships. Canada commercial lines GWP increased 17% (11% in
constant currency) to GBP716 million (HY21: GBP614 million) due to
increased rate in the prevailing hard market and new business
growth in mid-market and large corporate accounts.
UK personal lines GWP was 1% lower at GBP1,198 million (HY21:
GBP1,213 million). Retail premiums were stable with growth in
household business partly offsetting a reduction in motor, as we
maintained pricing discipline in a soft rating environment.
Intermediated premiums were 2% lower as we continue to reshape the
portfolio towards more profitable segments. Canada personal lines
GWP of GBP1,138 million (HY21: GBP1,047 million) was up 9% (4% in
constant currency) due to rate increases against the current
inflationary environment and new business growth in our direct
business.
1 Operating profit represents Group adjusted operating profit
which is a non-GAAP APM. Operating profit is not bound by the
requirements of IFRS. Further details are included in the 'Other
information' section.
Page 10
Aviva Investors
Sterling
6 months 6 months %
Operating profit 2022 2021 change
----------------- -------- -------- --------
Aviva Investors 14 19 (26)%
----------------- -------- -------- --------
Aviva Investors operating profit(1) reduced to GBP14 million
(HY21: GBP19 million), but increased to GBP25 million (HY21: GBP24
million) excluding cost reduction implementation and strategic
investment costs, driven by a bigger impact of cost reduction
initiatives which included the completion of the first phase of the
transition to a new scalable real assets operating model with loan
servicing successfully outsourced to Mount Street. Cost efficiency
measures and streamlining of the business resulted in a 2%
reduction in baseline controllable costs to
GBP165 million (HY21: GBP168 million). The cost income ratio
remained flat at 87% (HY21: 87%).
Net flows Assets under management
---------------------------- --------------------------------------
Full
6 months 6 months Sterling 6 months 6 months Sterling Year
2022 2021 % 2022 2021(3) % 2021
GBPm GBPm change GBPm GBPm change GBPm
----------------------------------- -------- -------- -------- --------- -------- -------- -------
Aviva Investors (4,253) 829 (613)% 231,742 258,382 (10)% 267,780
Of which: Aviva Investors external
assets(2) 202 1,084 (81)% 40,464 53,052 (24)% 51,332
----------------------------------- -------- -------- -------- --------- -------- -------- -------
Aviva Investors outflows, excluding cash and liquidity funds,
totalled GBP(4.3) billion compared to net inflows of GBP0.8 billion
in the first half of 2021. This reflected expected outflows from
internal assets, mainly Heritage, and withdrawals by clients
previously part of the Group, mainly in France. External net
inflows, excluding strategic actions and cash and liquidity funds,
were GBP0.2 billion (HY21: GBP1.1 billion). AUM reduced by GBP36
billion during the first half of 2022 to GBP232 billion,
predominantly driven by adverse market movements across all asset
classes in the period.
Our long-term outlook remains positive as we continue to build
and deliver growth through our strengths of environmental, social
and governance (ESG), real assets, infrastructure, credit and
sustainable equities.
International Investments
International Investments comprises our joint ventures and
associates in Singapore, China and India, providing us with value
creation potential and optionality in attractive and fast-growing
markets.
6 months 6 months Sterling
2022 2021 %
GBPm GBPm change
----------------- -------- -------- --------
Operating profit 55 55 -%
PVNBP 569 617 (8)%
VNB 46 59 (23)%
----------------- -------- -------- --------
Operating profit(1) was flat at GBP55 million (HY21: GBP55
million). PVNBP of GBP569 million (HY21: GBP617 million) and VNB of
GBP46 million
(HY21: GBP59 million) were down on the prior year due to the
impact of COVID-19 restrictions in China impacting volumes and
strong prior year comparatives from new product launches in
Singapore in 2021. Solvency II OFG was down 11% to GBP75 million
(HY21: GBP84 million).
Corporate centre costs, Group debt costs and Other
Corporate centre costs and Other operations of GBP138 million
(HY21: GBP134 million) increased due to higher cost reduction
implementation, IFRS 17 costs and project costs. Excluding these
costs, corporate centre costs of GBP68 million were down 7% versus
HY21.
Group debt costs and other interest reduced to GBP128 million
(HY21: GBP180 million). External debt costs reduced 23% as a result
of GBP1.9 billion reduction in external debt in 2021. Internal
lending arrangements are lower than prior year due to early
repayment of capital towards the end of 2021 and partially offset
by higher interest rates. Net finance income on the main UK pension
scheme increased due to an increase in interest rates and opening
assets.
1 Operating profit represents Group adjusted operating profit
which is a non-GAAP APM. Operating profit is not bound by the
requirements of IFRS. Further details are included in the 'Other
information' section. | 2 External net flows above exclude net
flows from strategic actions. | 3 Assets under management at 30
June 2021 have been re-presented in line with disclosures at 31
December 2021 to reflect movements in continuing and discontinued
business, and a re-classification of certain funds between internal
and external.
Page 11
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 (including
those arising from the Russia-Ukraine conflict); 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 longer-term impact
of COVID-19) on our business activities and results of operations;
the transitional, litigation and physical risks associated with
climate change; failure to understand and respond effectively to
the risks associated with environmental, social or governance
("ESG") factors; 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 customers 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, separation issues and other risks
associated with our business disposals; and other uncertainties,
such as diversion of management attention and other resources,
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 (for example, FCA Consumer Duty and
Solvency II). Please see Aviva's most recent Annual Report and
Accounts 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.
Aviva plc is a company registered in England No. 2468686.
Registered office
St Helen's
1 Undershaft
London
EC3P 3DQ
Page 12
Notes to editors
-- All figures have been retranslated at average exchange rates
applying for the period, with the exception of the capital position
which is translated at the closing rates on 30 June 2022. The
average rates employed in this announcement are 1 euro =
GBP0.84
(6 months to 30 June 2021: 1 euro = GBP0.87) and CAD$1 = GBP0.61
(6 months to 30 June 2021: CAD$1 = GBP0.58).
-- Growth rates in the press release have been provided in
sterling terms unless stated otherwise. The following supplement
presents this information on both a sterling and constant currency
basis. All percentages, including currency movements, are
calculated on unrounded numbers so minor rounding differences may
exist.
-- Throughout this report 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.
-- We are the UK's leading Insurance, Wealth & Retirement
business and we operate in the UK, Ireland and Canada. We also have
international investments in Singapore, China and India.
-- We help our 18.5 million customers make the most out of life,
plan for the future, and have the confidence that if things go
wrong we'll be there to put it right.
-- We have been taking care of people for 325 years, in line
with our purpose of being 'with you today, for a better tomorrow'.
In 2021, we paid GBP30.2 billion in claims and benefits to our
customers.
-- Aviva is a market leader in sustainability. 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. Find out more about our climate goals at
www.aviva.com/climate-goals and our sustainability ambition and
action 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/about-us/our-people
-- As at 30 June 2022, total Group assets under management at
Aviva Group are GBP353 billion and our Solvency II shareholder
capital surplus is GBP10.3 billion. Our shares are listed on the
London Stock Exchange and we are a member of the FTSE 100
index.
-- For more details on what we do, our business and how we help
our customers, visit www.aviva.com/about-us
Click on, or paste the following link into your web browser, to
view the complete Press Release and Half Year Report PDF
document:
http://www.rns-pdf.londonstockexchange.com/rns/4764V_1-2022-8-9.pdf
The document is available to view on the Company's website at
https://www.aviva.com/investors/reports/ and
copies have been submitted to the National Storage Mechanism and
will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
Enquiries:
Investor Media Contacts Timings
contacts
--------------- ----------- --------------- ----------- ------------------------------------
Rupert Taylor +44(0) 7385 +44(0) 7800 0700 hrs
Rea 494 440 Andrew Reid 694 276 Presentation slides: BST
Joel von +44(0) 7384 +44(0) 7800 Real time media conference 0800 hrs
Sternberg 231 238 Sarah Swailes 694 859 call: BST
+44(0) 7837 +44(0) 7800 Analyst conference 0845 hrs
Michael O'Hara 234 388 Steve Whitelock 691 128 call / audiocast: BST
https://www.aviva.com
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IR UKSKRUWUWRAR
(END) Dow Jones Newswires
August 10, 2022 02:00 ET (06:00 GMT)
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