Patchy Numbers from Aviva; Negative Net Flows Remain the Primary Concern in Our Opinion

Aviva has reported poor results for the third quarter of this year. On a nine-month basis the numbers that stand out to us are a 4% decline in wealth net flows, driven by a 20% drop in platform net flows. That has been offset by some better performance in workplace and individual pensions; however, while the platform business is low margin, it is still a bit concerning. Furthermore, Aviva's investors business had a GBP 3.7 billion outflow after divesting the French business. Compared with the end of the second quarter, wealth net flows are up 2% yet there is a 6% decline in net flows in Aviva investors. In the personal lines general insurance business gross written premium was flat in the U.K. and up in Canada, driven by Ontario auto and home insurance. Commercial lines insurance was up across the board and underwriting was decent. We think life performance was solid and the rise in protection and health insurance present value for new business, though the new business margin has slipped a little.