Resilient financial performance
· Operating profit 1, ‡ # of £3,161m (2019: £3,184m) and IFRS profit for the year of £2,910m (2019: £2,663m)
· Core business unit operating profit1, ‡ # of £2,492m (2019: £2,558m)
· Cash remittances‡# of £1,500m (2019: £2,597m)
· Core business cash remittances‡# of £1,359m (2019: £1,409m excluding UK Life special remittance)
Sales of Aviva France and Aviva Italy in 2021 – major progress in our strategic transformation
· On completion will significantly strengthen capital and liquidity: excess capital by c.£3.0bn and centre cash by c.£3.9bn
· Build on announced sales of Singapore, Vietnam, Hong Kong, Indonesia and Turkey
Robust financial strength
· Solvency II shareholder cover ratio‡# of 202% (2019: 206%) and centre liquidity‡ of £4.1bn (2019: £2.4bn)
· Solvency II debt leverage ratio‡ of 31% (2019: 31%)
Delivering against our capital framework
· Expect £1.7bn debt reduction in H1 2021 including £800m tender offer announced today
· Investing for cash generative growth in our Core markets
· Expect to return to shareholders excess capital above 180% Solvency II shareholder cover ratio‡#
· Total dividend of 21p (2019: 15.5p per share) with a final proposed dividend of 14p per share
Targeting sustainable growth across the UK, Ireland and Canada
· Momentum with record trading in Savings & Retirement, BPA and Group Protection
· New cumulative cash remittance‡# target of over £5bn between 2021-23 with guidance for £1.8bn in 2023
· First major insurer globally to target Net Zero greenhouse emission status by 2040
Amanda Blanc, Chief Executive Officer, said:
“Over the past year we have supported our customers in the most challenging of circumstances. Across the whole of Aviva our people have been outstanding and I cannot thank them enough for all they have achieved.
2020 was a year of significant change for Aviva. We have taken major steps forward in simplifying the business, most recently with the sale of Aviva France and today's announcement of the sale of the rest of our Italian operations. Our strategic focus is now on the UK, Ireland and Canada where we have leading positions. We are putting customers at the heart of everything we do and I am confident we will transform Aviva's financial performance and deliver greater value for our shareholders. I recognise we have much more to do and we are getting on with it.
Our performance in 2020 demonstrates the resilience of our Core businesses and our growth potential. We delivered record sales in group protection; record sales of bulk purchase annuities; and record net flows ‡ in savings and retirement, where we are the largest provider of workplace pensions in the UK.
Aviva is financially strong and following the completion of the major disposals, we will be in a position to make a substantial return of capital to our shareholders. We are also announcing today an £800m debt tender offer. This allows us to accelerate our debt reduction plans and lower debt by a total of £1.7bn in the first half of this year.
Aviva is proud to be the UK's leading insurer. We are the only insurer in the UK to meet the needs of customers at every stage of their lives. Our potential is clear and we are determined to realise it for the benefit of our customers, our people and our shareholders.”
# Symbol denotes key financial 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 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 of this measure are included in the 'Other information' section.
Cash remittances‡#
|
|
2020 £m |
2019 £m |
Change |
|
Core markets |
1,359 |
1,909 |
(29)% |
|
Manage-for-value markets |
127 |
613 |
(79)% |
|
Other |
14 |
75 |
(81)% |
|
Group cash remittances |
1,500 |
2,597 |
(42)% |
Profit
|
|
2020 £m |
2019 £m |
Sterling % change |
|
Core markets |
2,492 |
2,558 |
(3)% |
|
Manage-for-value markets |
|
|
|
|
Continuing operations1 |
999 |
899 |
11% |
|
Discontinued operations2 |
312 |
251 |
25% |
|
Market operating profit |
3,803 |
3,708 |
3% |
|
Corporate centre and Other Group operations |
(272) |
(204) |
(33)% |
|
Group debt costs and other interest |
(370) |
(320) |
(16)% |
|
Group adjusted operating profit3,‡# |
3,161 |
3,184 |
(1)% |
|
|
|
|
|
|
IFRS profit for the year4 |
2,910 |
2,663 |
9% |
|
|
2020 |
2019 |
Sterling % change |
|
Operating earnings per share5‡# |
60.8p |
60.5p |
– |
|
Basic earnings per share |
70.2p |
63.8p |
10% |
Controllable costs‡
|
|
2020 £m |
Restated6 2019 £m |
Sterling % change |
|
Excluding cost reduction implementation and IFRS 17 costs |
|
|
|
|
Core markets |
2,735 |
2,821 |
(3)% |
|
Corporate centre and Other Group operations |
250 |
253 |
(1)% |
|
Cost reduction implementation and IFRS 17 costs7 |
105 |
64 |
64% |
|
Core markets, Corporate centre and Other Group operations |
3,090 |
3,138 |
(2)% |
|
Manage-for-value markets |
845 |
884 |
(4)% |
|
Controllable costs |
3,935 |
4,022 |
(2)% |
Solvency II operating capital generation (OCG)‡#
|
|
2020 £m |
2019 £m |
Sterling % change |
|
Core markets8 |
1,948 |
1,850 |
5% |
|
Manage-for-value markets |
|
|
|
|
Continuing operations1 |
6 |
805 |
(99)% |
|
Discontinued operations2 |
166 |
62 |
168% |
|
Market operating capital generation |
2,120 |
2,717 |
(22)% |
|
Corporate centre costs and Other8 |
108 |
(174) |
162% |
|
Group external debt costs |
(296) |
(284) |
(4)% |
|
Group operating capital generation |
1,932 |
2,259 |
(14)% |
Solvency II operating own funds generation‡ and Solvency II return on capital‡/equity‡#
|
|
Solvency II operating own funds generation |
Solvency II return on capital/equity |
||||
|
|
2020 £m |
2019 £m |
Sterling % change |
2020 % |
2019 % |
Change |
|
Core markets |
1,740 |
1,853 |
(6)% |
9.3% |
10.4% |
(1.1)pp |
|
Manage-for-value markets |
497 |
850 |
(42)% |
6.2% |
11.4% |
(5.2)pp |
|
Group centre costs and Other |
(250) |
(162) |
(54)% |
N/A |
N/A |
N/A |
|
Solvency II return on capital |
1,987 |
2,541 |
(22)% |
8.1% |
10.8% |
(2.7)pp |
|
|
|
|
|
|
|
|
|
Group operating own funds generation and return on equity9 |
1,691 |
2,257 |
(25)% |
9.8% |
14.3% |
(4.5)pp |
Capital Position
|
|
31 December 2020 |
31 December 2019 |
Change |
|
Estimated Solvency II shareholder cover ratio10,‡# |
202% |
206% |
(4)pp |
|
Estimated Solvency II surplus10 |
£13.0bn |
£12.6bn |
3% |
|
Solvency II net asset value per share10,‡ |
442p |
423p |
4% |
|
Solvency II debt leverage ratio‡ |
31% |
31% |
– |
Dividend
|
|
2020 |
2019 |
|
Interim dividend per share |
7.00p |
9.50p |
|
Second interim dividend per share |
– |
6.00p |
|
Final dividend per share |
14.00p |
– |
|
Total dividend per share |
21.00p |
15.50p |