Aviva Expects to Exceed Mid-Term Targets After 1st Half Operating Profit Slight Beat — Update

By Elena Vardon

Aviva beat its guidance and analyst expectations as it reported higher operating profit for the first half of 2023 on growth across its divisions and said it expects to exceed its mid-term financial targets.

The British insurer and asset manager on Wednesday posted an operating profit for the six months ended June 30 of 715 million pounds ($908.5 million), slightly ahead of company-complied consensus expectations of GBP701 million and its recently-issued guidance of around GBP700 million. This compares with restated GBP661 million reported for the same period the previous year.

It swung to IFRS post-tax profit of GBP377 million from a restated loss of GBP198 million, it said.

The group, which operates in the U.K., Ireland and Canada, said its general insurance gross written premiums reached GBP5.27 billion in the period, beating expectations of GBP5.15 billion and up from GBP4.69 billion a year earlier.

Chief Executive Amanda Blanc said in a media call that the strong performance in both personal and commercial lines was attributable to the fact that the group priced for inflation ahead of the market.

Aviva closed the half year with a solvency II cover ratio--a measure of capital strength--of 202% compared with 196% at March 31 and consensus of 199%.

The FTSE 100-listed group is confident on its outlook for 2023 and backed its operating profit growth target of between 5% and 7% on 2022's GBP1.35 billion.

It is on track to exceed its generation target of GBP1.5 billion per year for solvency II operating own funds by 2024 and its cash remittance target of over GBP5.4 billion cumulative over 2022 to 2024, it said. It added it expects to deliver on its target to cut gross costs by GBP750 million by 2024 one year early.

The board declared an interim dividend of 11.1 pence a share, up from 10.3 pence a year prior.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

August 16, 2023 03:47 ET (07:47 GMT)

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