Aviva commits to the UK as profits grow by 13 per cent

Aviva
Aviva
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Insurance firm Aviva grew its profits by 13 per cent to £1.3bn as the broker reaffirmed its committment to the UK.

The group, which employs around 3,000 people in Yorkshire, saw its dividend increase by 10 per cent.

Mark Wilson, Group Chief Executive Officer, said: “We are delivering consistent, stable and predictable growth despite challenging market conditions.

“Our UK businesses delivered encouraging results. We are growing in the UK, we are investing in the UK. We like the UK. And we are also benefitting from Aviva’s diversity, with 42% of our earnings coming from outside of the UK.

“The 10% increase in the dividend, up 32% since 2013, is another step towards our target pay-out ratio of 50% and underpins our confidence in delivering sustainable and growing returns.

“We are continuing to maintain a strong balance sheet, with a solvency ratio of 174% 2,3, toward the upper end of our working range.

Aviva

Aviva

“Aviva’s strong financial position and diversity mean we are well insulated from external events. We have deliberately designed Aviva to be resilient to a low interest rate environment.

“We remain confident in our ability to deliver on our key commitments to grow earnings, cash and dividends.”

The rise was broadly in line with a company supplied consensus forecast of 1.31 billion pounds and compared with 1.17 billion in the year-earlier period.

The solid performance meant it had a capital surplus under the industry’s new Solvency II capital rules of 9.5 billion pounds. This was down slightly from the year-end, but helped to supply better than expected operating capital of 1.2 billion pounds.

“We are delivering consistent, stable and predictable growth despite challenging market conditions.”

Shares in Aviva were 4 percent by 0728 GMT and were biggest gainers in FTSE 100.

The company said its combined operating ratio in its general insurance business - a key measure of underwriting profitability - had weakened slightly to 96.2 percent from 93.1 percent. A figure of less than 100 percent indicates an underwriting profit

As well as facing rising payouts following fires and floods in Canada and Europe, the company also had to pay into flood levy schemes in Britain and Poland.