Aviva First-Half Profit Rises on Lower Operating Costs

Aviva Plc (AV/), the U.K.’s second-biggest insurer by market value, reported a 4 percent rise in first-half profit that topped analysts’ estimates after costs fell.

Operating profit in the six months through June rose to 1.05 billion pounds, according to a statement today. That compared with the 1.03 billion-pound average prediction of 16 analysts provided by the company. The insurer also increased its interim dividend 4.5 percent to 5.85 pence.

“The half-year results show the momentum in Aviva’s turnaround continues,” Chief Executive Officer Mark Wilson said in the statement. “Aviva remains a work in progress and these results are a step in the right direction.”

Wilson last month pledged to continue to cut costs and attract funds to the company’s investment unit to boost profitability and further shrink an internal loan. Last year, he hired Euan Munro from Standard Life Investments to run Aviva Investors, which in July revealed a new multi-asset strategy to attract third-party assets.

Operating expenses were 1.4 billion pounds in the first half, dropping 129 million pounds from a year earlier.

Aviva rose 2.6 percent to 502.5 pence at 10:25 a.m. The 32-member Bloomberg Europe 500 Insurance Index gained 0.2 percent.

Operating profit from fund management climbed 14 percent to 48 million pounds, the company said.

The insurer said it reduced its internal loan to 3.6 billion pounds at the end of July from 4.1 billion pounds in February.

(An earlier version of this story was corrected to show operating profit was 1.05 billion pounds.)

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

To contact the editors responsible for this story: Edward Evans at eevans3@bloomberg.net Mark Bentley, Steve Bailey

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