SOURCE: Aviva PLC

March 06, 2014 02:10 ET

Aviva plc 2013 Preliminary Results

LONDON, UNITED KINGDOM--(Marketwired - Mar 6, 2014) -


Start of part 1 of 5

News Release
Aviva plc
2013 Preliminary Announcement

                            Aviva plc
                2013 Preliminary Results Announcement

Cash flow   - Cash remittances1 to Group up 40% at
            GBP1,269 million2 (FY12: GBP904 million)
            - Operating capital generation1 GBP1,772 million
            (FY12: GBP1,859 million)
            - Remittance ratio 72%1,2 (FY12: 49%)
            - Final dividend per share 9.4p (FY12: 9p). Full year
            dividend per share 15p.

Profit      - Operating profit1 6% higher at GBP2,049 million (FY12:
            GBP1,926 million)
            - IFRS profit after tax GBP2,151 million (FY12: loss after
            tax GBP2,934 million)

Expenses    - Operating expenses GBP3,006 million1,3, down 7%
            - GBP360 million cost savings already achieved
            - 2013 cost savings ahead of plan

Value of    - Value of new business5 up 13% at GBP835 million
new         (FY12: GBP 738 million)
business    - Poland, Turkey and Asia5 contributed 21% of Group VNB
            (FY12: 16%) and collectively grew 49%

Combined    - Combined operating ratio 97.3% (FY12: 97.0%)
operating   - 2014 flood losses of GBP60 million in the UK in January
ratio        and February, in line with long term average

Balance     - Intercompany loan reduced by GBP1.7 billion to
sheet       GBP4.1 billion at end of February 2014
            (FY12: GBP5.8 billion)
            - Agreed plan to reduce inter-company loan to
            GBP2.2 billion by end of 2015, utilising GBP450 million of
            existing cash resources and GBP1.45 billion of other
            actions
            - Liquidity of GBP1.6 billion at end of February 2014
            - Economic capital surplus4 GBP8.3 billion (FY12: GBP7.1
            billion4), coverage ratio 182%
            - IFRS net asset value per share 270p (FY12: 278p)
            - MCEV net asset value per share 445p (FY12: 422p)

Mark Wilson, Group Chief Executive Officer, said:"The turnaround at Aviva
is intensifying. We have focused the business
on 'cash flow plus growth' and the benefits are starting to be
reflected in our performance. Cash flows to the Group are up 40%,
operating expenses are down 7%, operating profit is up 6% and Value of
New Business is up 13%. After a GBP2.9 billion loss after tax last year,
Aviva has delivered a GBP2.2 billion profit."Following our exit from a
number of low margin, underperforming or
non-strategic businesses, Aviva is simpler, more focused and better
managed. We have significantly improved our capital surplus, increased
our liquidity and have a stronger leadership team."Although we have made
progress in 2013, I want to guard against
complacency. Aviva still has issues to address. Have we made progress?
Yes, some. Is it a little faster than anticipated? Probably. Have we
unlocked the full potential at Aviva? Not yet."

1 On a continuing basis, excluding US Life and Delta Lloyd

2 Cash remittances include amounts received from UK General
Insurance in January 2014 in respect of activity in 2013.

3 Operating expenses excludes integration and restructuring costs
and US Life

4 The pro forma surplus at FY12 included the benefit of disposals
and an increase in pension scheme risk allowance from five to ten years
of stressed contributions.

The economic capital surplus represents an estimated position. The
capital requirement is based on Aviva's own internal assessment and
capital management policies. The term 'economic capital' does not imply
capital as required by regulators or other third parties.

5 Excluding Malaysia and Sri Lanka.


Key financial metrics

Cash

                         Cash remitted to       Operating capital
                                Group              generation

                                                    Restated1
                         2013  2012 Sterling%  2013      2012 Sterling%
Continuing operations,   GBPm  GBPm   change   GBPm      GBPm    change
excluding Delta Lloyd
United Kingdom &
Ireland Life              370   150     147%    595       688     (14)%
United Kingdom & Ireland
general insurance &
health2                   347   150     131%    374       376      (1)%
Europe                    388   343      13%    558       571      (2)%
Canada                    130   136     (4)%    177       192      (8)%
Asia and Other             34   125    (73)%     68        32      113%
Total                   1,269   904      40%  1,772     1,859      (5)%

Operating profit: IFRS basis
                                                    Restated1
                                               2013      2012 Sterling%
Continuing operations, excluding Delta Lloyd   GBPm      GBPm    change
Life business                                 1,901     1,831        4%
General insurance and health                    797       894     (11)%
Fund management                                  93        51       82%
Other*                                        (742)     (850)       13%
Total                                         2,049     1,926        6%
* Includes other operations, Corporate Centre costs and Group debt
and other interest costs.

Expenses
                                               2013      2012 Sterling%
Continuing operations                          GBPm      GBPm    change
Operating expenses                            3,006     3,234      (7)%
Integration & restructuring costs               363       461     (21)%
Expense base                                  3,369     3,695      (9)%

Value of new business
                                               2013      2012 Sterling%
Continuing operations                          GBPm      GBPm    change
United Kingdom                                  435       420        4%
Ireland                                           6       (8)      175%
France                                          166       119       39%
Poland                                           51        35       46%
Italy                                            15        29     (48)%
Spain                                            33        56     (41)%
Turkey & Other Europe                            38        32       19%
Asia - excluding Malaysia & Sri Lanka            91        55       65%
Value of new business - excluding Malaysia &
Sri Lanka                                       835       738       13%
Malaysia & Sri Lanka                              1         8     (88)%
Value of new business                           836       746       12%

General insurance combined operating ratio
Continuing operations                          2013      2012    Change
United Kingdom & Ireland                      97.2%     98.6%   (1.4)pp
Europe                                        98.1%     99.4%   (1.3)pp
Canada                                        94.6%     93.4%     1.2pp
General insurance combined operating ratio    97.3%     97.0%     0.3pp

IFRS Profit after tax
                                               2013      2012 Sterling%
                                               GBPm      GBPm    change
IFRS profit/(loss) after tax                  2,151   (2,934)      n/a

Dividend
                                                         2013     2012
Final dividend                                           9.4p     9.0p
Total dividend per share                                15.0p    19.0p

Capital position
                                                                   Pro
                                                                forma4
                                               2013      2012     2012
                                              GBPbn     GBPbn    GBPbn

Estimated economic capital surplus3             8.3       5.3      7.1
Estimated IGD solvency surplus3                 3.6       3.8      3.9
IFRS net asset value per share                 270p      278p
MCEV5 net asset value per share                445p      422p


1 The Group adopted the amendments to IAS19 and IFRS10 during the
period and the requirements of the revised standards have been applied
retrospectively.

2 Cash remittances include amounts received from Aviva Insurance
Limited in January 2014 in respect of 2013 activity.

3 The economic capital surplus and IGD solvency surplus represent an
estimated position. The economic capital requirement is based on
Aviva's own internal assessment and capital management policies. The
term 'economic capital' does not imply capital as required by
regulators or other third parties.

4 The pro forma economic capital and IGD surplus at FY12 includes
the benefit of completing the US Life, Aseval, Delta Lloyd and Malaysia
transactions and, for economic capital only, an increase in pension
scheme risk allowance from five to ten years of stressed contributions.

5 In preparing the MCEV information, the directors have done so in
accordance with the European Insurance CFO Forum MCEV Principles with
the exception of stating held for sale operations at their expected
fair value, as represented by expected sale proceeds, less cost to
sell.


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Contacts

Investor contacts   Media contacts      Timings
Colin Simpson       Nigel Prideaux      Results and presentation slides
+44 (0)20 7662 8115 +44 (0)20 7662 0215 06:30 hrs GMT
                                         www.aviva.com 
David Elliot        Andrew Reid
+44 (0)20 7662 8048 +44 (0)20 7662 3131 Real time media conference call
                                        07:30 hrs GMT

                    Sarah Swailes
                    +44 (0)20 7662 6700 Analyst presentation
                                        08.30 hrs GMT

                                        Live webcast
                                        08:30 hrs GMT
                                        www.avivawebcast.com/prelim2013/ 

End of part 1 of 5




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