Aviva Sees Steady Gains In New Business
November 8, 2013 by Robert O'Connor
In a low-key assessment of its performance over the first nine months of 2013,U.K.-based multiline insurer Aviva plc cited steady gains after a 14% increase in value of new business, along with good performances in international markets.
“Progress is in line with our expectations, “Mark Wilson, group chief executive officer, said in a statement. “And we remain focused on delivering cash flow plus growth.”
Value of new business was 571 million pounds (US$918 million), up from 503 million pounds in the first nine months of 2012. The figure for Poland grew by 48%.Asia was up 45%. The combined ratio was 96.9, compared with 96.7 for the same period in 2012.
Describing the new business as “our key measure of growth,” Wilson said the group had done particularly well in Turkey, Poland and Asia. Aviva, he added, is looking closely at its “depressed” new business figures in Italy and Spain, markets it had earlier thought of as having strong prospects.
Wilson described capital generation of 1.3 billion pounds as “stable.” The economic capital surplus ended the third quarter at 8 billion pounds.
“We continue to make satisfactory progress on cost reduction,” he said, noting that the operating expenses of 2.27 billion pounds were 10% under the baseline that was set in 2011.
Wilson said the sale, for aboutUS$1.55 billion, of Aviva USA to private equity-supported Athene Holding Ltd. (Best’s News Service, Oct. 4, 2013) was “an important step in simplifying Aviva. We also made a number of senior management changes recently to ensure we have the right team to take Aviva forward.”
Wilson also pledged to bring down the group’s “historically high” restructuring costs.
“Overall operating performance continues to be satisfactory and Aviva is where I thought it would be at this point in its transformation,” Wilson said.
While Aviva detects signs of improvement in the wider economic environment, Wilson said, the group’s prospects do not depend on that.
(By Robert O’Connor, London editor: Robert.OConnor@ambest.com)
