Coronavirus Update

Aviva Plc - FY19 Results

This content has been sourced from: https://www.investegate.co.uk/aviva-plc--av--/rns/...

Maurice Tulloch, Chief Executive Officer, said:

In 2019, we set out our priorities and financial targets, strengthened our leadership team and remained focused on helping our customers prepare for a better future. We've made good progress, but there is much more to do.

Our return on equity was 14.3% and operating profit increased 6% to a record £3.2 billion. Our capital position remains strong and resilient at a 206% Solvency cover ratio. The Board has increased the full year dividend by 3% to 30.9 pence per share.

Customers are choosing Aviva to help them save for their future, draw a secure income in retirement and insure what matters most to them. In 2019, we increased customer numbers by 2% to 33.4 million, and improved customer satisfaction levels.

In general insurance, sales are up 2% and the outlook is positive in the majority of our markets. In our major life businesses, we have increased customer net inflows and grown assets by 9% to £417 billion. Aviva Investors secured third party net inflows of £2.3 billion on the back of strong investment performance.

My objective is to run Aviva better. We will improve business performance and enhance returns through disciplined action on expenses and underwriting. We will focus capital and resources where we can achieve competitive advantage and strong returns and we will take robust action across the portfolio where our performance falls short or where we can see a better way of delivering value to our shareholders.

 

Economic returns

· Solvency II return on equity1,2,  14.3% (2018: 12.5%)

· Own funds generation1,2 £2.3 billion (2018: £2.0 billion)

· Operating capital generation2,‡# £2.3 billion (2018: £3.2 billion)

Profit

· Operating profit3,‡# up 6% to £3,184 million (2018: £3,004 million5)

· Operating EPS3,4,‡# up 8% to 60.5 pence (2018: 56.2 pence5)

· IFRS profit before tax £3,374 million (2018: £2,129 million)

· Basic EPS 63.8 pence (2018: 38.2 pence)

Dividend

· Final dividend per share 21.40 pence

· Total 2019 dividend per share 30.9 pence (2018: 30.0 pence)

Capital & Cash

· Solvency II capital surplus2 £12.6 billion (2018: £12.0 billion)

· Solvency II cover ratio2,‡# 206% (2018: 204%)

· Solvency II net asset value2 per share 423 pence (2018: 392 pence)

· Cash remittances‡# £2.6 billion (2018: £3.1 billion)

· Centre liquidity6 £2.4 billion (2018: £1.6 billion)

· Debt leverage ratio 31% (2018: 33%)

· IFRS net asset value per share 434 pence (2018: 424 pence)

Performance

· Life PVNBP up 12% to £45.7 billion (2018: £40.8 billion)

· Value of new business (VNB) up 2% to £1,224 million (2018: £1,202 million)

· General insurance net written premiums (NWP) up 2% to £9.3 billion (2018: £9.1 billion)

· General insurance combined operating ratio (COR) 97.5% (2018: 97.2%5)

· Controllable costs £3,939 million (2018: £3,968 million)

· Achieved savings £72 million7, before programme implementation and IFRS 17 costs of £59 million

 

Key financial metrics

 

Profit

 

2019
£m

Restated1

 2018
£m

Sterling % change

Operating profit2,‡#

3,184

3,004

6%

Operating earnings per share2,3‡#

60.5p

56.2p

8%

IFRS profit before tax attributable to shareholders

3,374

2,129

58%

Basic earnings per share

63.8p

38.2p

67%

Capital Position

 

31 December 2019

31 December 2018

Change

Estimated shareholder Solvency II cover ratio4,‡#

206%

204%

2pp

Estimated Solvency II surplus4

£12.6bn

£12.0bn

5%

Solvency II net asset value per share

423p

392p

8%

Solvency II debt leverage

31%

33%

(2)pp

Dividend

 

2019

2018

Sterling % change

Final dividend per share

21.40p

20.75p

3%

Total dividend per share

30.90p

30.00p

3%

Solvency II basis: Operating capital generation (OCG)‡# and Cash remittances‡#

 

Solvency II Operating capital generation

 

 

Cash remittances

 

2019
£m

2018
£m

Sterling % change

2019
£m

2018
£m

Change

Group

2,259

3,198

(29)%

2,597

3,137

(17)%

Solvency II basis: Operating own funds generation and Return on capital/equity#

 

Solvency II Operating own funds generation

 

 

Solvency II Return on capital/equity

 

2019
£m

2018
£m

Sterling % change

2019
%

2018
 %

Change

UK Life and Investments, Savings & Retirement

1,314

1,663

(21)%

9.5%

11.3%

(1.8)pp

General Insurance

628

532

18%

14.0%

11.7%

2.3pp

Europe Life

574

384

50%

10.3%

6.9%

3.4pp

Asia Life

187

144

30%

12.7%

9.7%

3.0pp

 

 

 

 

 

 

 

Group5

2,257

2,022

12%

14.3%

12.5%

1.8pp

Expenses

 

2019
£m

Restated4  

2018
£m

Sterling % change

Operating expenses#

4,119

4,138

-

Controllable costs

3,939

3,968

(1)%

Value of new business: Adjusted Solvency II basis (VNB) and Present value of new business premiums (PVNBP)

 

 

 

VNB

 

 

PVNBP

 

2019
 m

2018
£m

Sterling % change

2019
£m

2018
£m

Sterling % change

UK Life

592

481

23%

27,570

23,946

15%

Europe Life

414

517

(20)%

13,772

12,641

9%

Asia Life

206

189

9%

3,057

2,656

15%

Other

12

15

(19)%

1,266

1,520

(17)%

Total

1,224

1,202

2%

45,665

40,763

12%

General insurance combined operating ratio (COR)  and Net written premiums (NWP)

 

COR

 

 

NWP

 

 

 

2019

Restated1  

2018

Change

2019

2018

Change

United Kingdom

97.9%

94.6%

3.3pp

4,218

4,193

1%

Canada

97.8%

103.1%

(5.3)pp

3,061

2,928

5%

Europe

95.7%

93.5%

2.2pp

2,017

1,985

2%

Group6

97.5%

97.2%

0.3pp

9,309

9,114

2%