10th Aug 2022 09:42
(Alliance News) - Aviva PLC shares jumped on Wednesday, as it reported an "excellent" first half and reiterated it is confident of meeting annual targets.
Shares in the London-based insurance company were up 8.7% to 450.45 pence each in London on Wednesday morning.
In the six months to June 30, its IFRS loss widened to GBP633 million from a GBP198 million loss a year prior. Aviva explained that this "largely" reflects adverse market movements and has no impact on capital or cash remittances. Adjusted operating profit rose 14% to GBP829 million from GBP725 million.
UK & Ireland Life sales were up 4% to GBP16.84 billion, from GBP16.24 billion the year before. Notably, sales in its Annuities & Equity Release division climbed 12% to GBP2.76 billion compared to GBP2.47 billion.
Aviva's General Insurance gross written premiums rose 7.3% to GBP4.69 billion from GBP4.37 billion, but the combined operating ratio worsened to 94.0% from 91.6%. A combined ratio below 100% indicates underwriting profit.
New business sales in its Life unit were up 3.0% to GBP17.4 billion from GBP16.9 billion.
Its Solvency II cover ratio fell to 234% from 244%.
Aviva declared an interim dividend of 10.3p per share, rising 40% from 7.35p a year earlier, in line with its full year guidance of around 31.0p per share. The interim dividend is worth a total of GBP289 million.
Looking ahead, Aviva said it is confident of its outlook for 2022, despite a challenging market backdrop. The insurer also said it expects to start a share buyback programme when its 2022 full year results are announced.
It also expects full year Solvency II cover ratio of 213%, for a further GBP1 billion debt reduction, pension scheme payment and the GBP385 million acquisition of Succession Wealth, which is expected to be complete in the second half of the year.
Chief Executive Amanda Blanc said: "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."
By Sophie Rose; [email protected]
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