LONDON--(Marketwired - May 16, 2013) -
Interim management statement for the three months to 31 March 2013
16 May 2013
Aviva plc First Quarter 2013
Interim Management Statement
Cash flow * Operating capital generation stable at GBP0.5 billion
* Continued focus on improving remittance ratios
Expenses * Operating expenses 10% lower at GBP769 million1 (1Q12:GBP852 million)
* Restructuring costs of GBP54 million in the quarter
Value of new * Pro forma2 value of new business up 18% to GBP191
business million (1Q12:GBP162 million)
* Increase driven by improved profitability in UK Life
and Asian growth
Combined * Combined operating ratio stable at 96% (1Q12: 96%)
Balance sheet * IFRS net asset value3 increased 9% to 302p (FY12:278p4)
* Pro forma5 economic capital surplus6 GBP7.3 billion,
173% (FY12: GBP7.1 billion, 172%)
* Internal debt reduced by GBP300 million
* Sale of remaining shareholding in Delta Lloyd, and
disposal of businesses in Russia and Malaysia completed
* Cash proceeds of EUR608 million for the transfer of
Aseval received in April
Mark Wilson, Group Chief Executive Officer, said:
"In the first quarter we have taken steps to deliver our investment
thesis of cash flow and growth.
"Our operating expenses are now 10% lower and we are on track to deliver
our cost savings target of GBP400 million.
"Our key measure of growth - value of new business - has increased by 18%
driven by actions to improve profitability in UK Life and growth in our
Asian business. In general insurance, our profitability was stable with a
COR of 96% with a strong result in Canada.
"Net asset value has increased by 9% to 302 pence and our internal debt
level has reduced by GBP300 million.
"Today's results demonstrate the first steps towards delivery. I am
conscious of the challenges and do not want to set expectations at an
unrealistic level. Progress so far has been satisfactory and there is a
great deal more we need to do for our shareholders."
1. Operating expenses excludes integration and restructuring costs and
US Life. Total expense base including integration and restructuring
costs and US Life business is 9% lower at GBP887 million (1Q 12:
2. Pro forma basis excludes US Life, Aseval, Russia, Malaysia, Sri
Lanka, Ark Life, Czech Republic, Hungary and Romania Life.
3. The pro forma IFRS net asset value reflects the proceeds of the
Aseval transaction with Bankia and the sale of our business in
4. The FY12 IFRS NAV of 278p excludes the proceeds of the Aseval
transaction with Bankia and the sale of our business in Malaysia.
5. The pro forma economic capital surplus includes the impact of the US
Life, Malaysia and Aseval transactions and an increase in pension
scheme risk allowance from five to ten years of stressed
6. 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.
Investor Media contacts Timings
Mark Wilson Nigel Prideaux Real time media conference call:
+44 (0)20 7662 +44 (0)20 7662 0730 hrs
Pat Regan Andrew Reid Analyst conference call: 0930 hrs
+44 (0)20 7662 +44 (0)20 7662 Tel: +44 (0)20 3147 4971
2228 3131 Conference ID: 875473
David Elliot Sarah Swailes
+44 (0)207 662 +44 (0)20 7662
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