Aviva plc (LON:AV) have published their annual results today, with the firm reporting higher profits across 2019.
The FTSE 100 listed firm have seen a mixed few months, but the update today shows good signs of progress for the firm.
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”.
Aviva reported that statutory pretax profit totaled at £3.93 billion across 2019, which was a massive increase on the £1.65 billion figure reported in 2018.
Notably, the firm added that this was boosted by £40.58 billion investment income, following a £10.91 billion loss in 2018.
Following changes to accounting standards, total pretax profit surged 58% to £3.37 billion.
The firm also reported that its’ return on equity improved from 12% to 14.3%, while the Solvency II cover ratio was 206% from 204%.
Income totaled £31.24 billion, which sees a 9% improvement on the 2018 figure – whilst the value of new businesses also increased to £1.22 billion.
Operating profit across 2019 was 6% higher at a record figure of £3.18 billion, which beats initial market consensus of £3.1 billion.
Finally, general insurance net written premiums rose 2% to £9.3 billion, and customer numbers were up 2% to 33.4 million.
Aviva are declaring a final dividend of 21.4 pence per share, taking the 2019 sum to 30.9p.
Tulloch concluded: “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”.
Aviva’s push through Asian difficulties
In November, Aviva updated the market about its’ intentions to sell their Hong Kong Division.
The insurance firm said it will simply its business structure into five operating divisions and sell its stake in the Hong Kong business to co-investor Hillhouse Capital.
“I am committed to running Aviva better,” said Tulloch ahead of a presentation to investors.
“We will be more commercially focussed, manage costs rigorously and be more disciplined in how we invest,” he added.
Additionally, Aviva set targets for the next three years. The highlights being a 12% return on equity, a £300 million net cost saving and an aim to generate a cash flow between £8.5 billion and £9.5 billion.
Aviva have managed to battle through a mixed year and produce a very impressive set of results – which will please and reassure shareholders.
Shares in Aviva trade at 351p (+0.27%). 5/3/20 10:47BST.
