Aviva plc Announces 3Q 2013 IMS
Aviva plc Announces 3Q 2013 IMS
LONDON -- (Marketwired) -- 11/07/13 -- *T
Interim management statement for the nine months to 30 September 2013
07 November 2013
Aviva plc Third Quarter 2013
Interim Management Statement
Mark Wilson, Group Chief Executive Officer, said:"Progress is in line with our expectations and we remain focused on delivering cash flow plus growth. In the first nine months of 2013 our key measure of growth, value of new business, increased by 14%. We had strong performances from France and our growth markets of Turkey, Poland and Asia. Conversely, value of new business remains depressed in our turnaround businesses of Italy and Spain, and this is being addressed."Capital generation in the period was stable at GBP1.3 billion and our economic capital surplus now stands at GBP8 billion. We continue to make satisfactory progress on cost reduction, with operating expenses 10% below the 2011 baseline."Aviva remains in the early stages of turnaround. Whilst we have resolved a key issue in the disposal of our US business and have made progress in a number of areas, there remains much work to be done."
Cash flow - Operating capital generation stable at GBP1.3 billion1
(9M12: GBP1.3 billion)
- Continued focus on improving remittance ratios
- Full update on cash remittances to be provided at the
Expenses - Operating expenses of GBP2,277 million, 10% lower than
our 2011 baseline
Value of new - Value of new business up 14% to GBP571 million2 (9M12: business GBP503 million)
- Increase driven by France (+33%) and our growth
markets of Turkey (+40%), Poland (+48%) and
- Growth markets contributed 22% of value of new
business (9M12: 18%)
Combined - Combined operating ratio stable at 96.9% (9M12: 96.7%) operating ratio
Balance sheet - Pro forma3 economic capital4 surplus at GBP8.0 billion
(HY13: GBP7.6 billion)
- IFRS net asset value per share 273p (HY13: 281p)
- MCEV5 net asset value per share 437p (HY13: 441p)
- Completed sale of US business for US$2.6 billion6
(GBP1.6 billion) in October
1 On a continuing basis. All numbers are continuing unless otherwise stated.
2 On a continuing basis excluding Malaysia and Sri Lanka.
3 The pro forma economic capital surplus includes the impact of the US Life transaction and an increase in the risk allowance for staff pension schemes from five to ten years of stressed contributions.
4 The economic capital surplus represents an estimated position. The capital requirement is based on Aviva's own internal assessment and capital management policies. The term 'economic capital' does not imply capital as required by regulators or other third parties.
5 In preparing the MCEV information, the directors have done so in accordance with the European Insurance CFO Forum MCEV Principles with the exception of stating held for sale operations at their expected fair value, as represented by expected sale proceeds, less cost to sell.
6 Transactional proceeds include repayment of an external loan of US$290 million.
Key financial metrics
Operating Capital Generation
9 months 9 months
2013 2012 Continuing Operations GBPbn GBPbn United Kingdom & Ireland life 0.4 0.5 United Kingdom & Ireland general insurance & health 0.3 0.3 Europe 0.5 0.4 Canada 0.1 0.1 Asia & Other - - Total 1.3 1.3
9 months 2013 9 months 2012 Sterling% Continuing operations GBPm GBPm change Operating expenses 2,277 2,449 (7)% Integration & restructuring costs 198 252 (21)% Total expenses 2,475 2,701 (8)%
Value of new business
9 months 9 months
2013 2012 Sterling% Continuing operations GBPm GBPm change United Kingdom 302 288 5% Ireland 2 (11) - France 112 84 33% Poland 34 23 48% Italy 7 19 (63)% Spain 19 32 (41)% Turkey 28 20 40% Other 1 2 (50)% Asia1 66 46 43% Value of new business - ongoing basis 571 503 14% Effect of disposals (Malaysia & Sri Lanka) 1 8 (88)% Value of new business 572 511 12%
General insurance combined operating ratio
9 months 9 months Continuing operations 2013 2012 Change United Kingdom 95.5% 97.0% (1.5)pp Ireland 98.3% 105.3% (7.0)pp France 97.4% 94.9% 2.5pp Italy 95.9% 100.9% (5.0)pp Other Europe 109.2% 119.8% (10.6)pp Europe 98.3% 99.5% (1.2)pp Canada 95.2% 92.6% 2.6pp General insurance combined operating ratio 96.9% 96.7% 0.2pp
Pro forma3 Pro forma3
30 September 30 June 30 September 30 June
2013 2013 2013 2013
GBPbn GBPbn GBPbn GBPbn
Estimated economic capital surplus2 8.0 7.6 7.4 7.1 Estimated IGD solvency surplus 3.7 3.7 4.0 4.2 IFRS net asset value per share 273p 281p MCEV4 net asset value per share 437p 441p
1 Excluding Malaysia and Sri Lanka.
2 The economic capital surplus represents an estimated position. The capital requirement is based on Aviva's own internal assessment and capital management policies. The term 'economic capital' does not imply capital as required by regulators or other third parties.
3 The pro forma economic capital and IGD surpluses include the impact of the US Life transaction and, for economic capital only, an increase in pension scheme risk allowance from five to ten years of stressed contributions.
4 In preparing the MCEV information, the directors have done so in accordance with the European Insurance CFO Forum MCEV Principles with the exception of stating held for sale operations at their expected fair value, as represented by expected sale proceeds, less cost to sell.
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