Aviva Newsroom - 07 November 2013

Aviva plc Interim management statement for the nine months to 30 September 2013

Mark Wilson, Group Chief Executive Officer, said:

“Progress is in line with our expectations and we remain focused on delivering cash flow plus growth. In the first nine months of 2013 our key measure of growth, value of new business, increased by 14%. We had strong performances from France and our growth markets of Turkey, Poland and Asia. Conversely, value of new business remains depressed in our turnaround businesses of Italy and Spain, and this is being addressed."

“Capital generation in the period was stable at £1.3 billion and our economic capital surplus now stands at £8 billion. We continue to make satisfactory progress on cost reduction, with operating expenses 10% below the 2011 baseline."

“Aviva remains in the early stages of turnaround. Whilst we have resolved a key issue in the disposal of our US business and have made progress in a number of areas, there remains much work to be done.”

Cash flow
  • Operating capital generation stable at £1.3 billion1 (9M12: £1.3 billion)
  • Continued focus on improving remittance ratios
  • Full update on cash remittances to be provided at the year end
  • Operating expenses of £2,277 million, 10% lower than our 2011 baseline
Value of new business  
  • Value of new business up 14% to £571 million2 (9M12: £503 million)
  • Increase driven by France (+33%) and our growth markets of Turkey (+40%), Poland(+48%) and Asia (+43%)
  • Growth markets contributed 22% of value of new business (9M12: 18%)
Combined operating ratio  
  • Combined operating ratio stable at 96.9% (9M12: 96.7%)
Balance sheet  
  • Pro forma3 economic capital4 surplus at £8.0 billion (HY13: £7.6 billion)
  • IFRS net asset value per share 273p (HY13: 281p)
  • MCEV5 net asset value per share 437p (HY13: 441p)
  • Completed sale of US business for US$2.6 billion6 (£1.6 billion) in October
1        On a continuing basis. All numbers are continuing unless otherwise stated.
2        On a continuing basis excluding Malaysia and Sri Lanka.
3        The pro forma economic capital surplus includes the impact of the US Life transaction and an increase in the risk
          allowance for staff pension schemes from five to ten years of stressed contributions.
4        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        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.
6        Transactional proceeds include repayment of an external loan of US$290 million.

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About Aviva plc

Aviva provides 34 million customers* with insurance, savings and investment products. We are the UK's* largest insurer and one of Europe's leading providers of life and general insurance*.

We combine strong life insurance, general insurance and asset management businesses under one powerful brand. We are committed to serving our customers well in order to build a stronger, sustainable business, which makes a positive contribution to society, and for which our people are proud to work.

* Source: 2012 Aviva plc annual report.