Aviva Newsroom - 15 May 2014

Aviva plc Interim Aviva plc Interim management statement for the three months to 31 March 2014

Aviva plc

First Quarter 2014 Interim Management Statement

Mark Wilson, Group Chief Executive Officer, said: “Aviva’s overall performance in the first quarter was reassuringly calm and stable, in marked contrast to the weather and regulatory developments. The value of new business increased by 13% – the sixth consecutive quarter of year-on-year growth – and our book value grew by 6%.

“We have made further progress simplifying our portfolio of businesses. Since our full year results in March, we have announced disposals of our Turkish general insurance business, US asset management boutique River Road, South Korean joint venture as well as a significant restructure of our Italian business.

“Aviva still faces challenges both in the external environment and in the business as we progress our turnaround. The regulatory environment is constantly changing and soft conditions persist in certain general insurance lines. As a business we remain focused on cash flow, expense efficiency and the clinical allocation of capital to areas where we can maximise returns. There is still much to do.“


Cash flow -   Operating capital generation £0.4 billion (1Q13: £0.4 billion)
-   Continued focus on improving cash remittances
Value of new business -   Value of new business up 13% in constant currency to £228 million1
    (1Q13: £208 million1,2)
-   Increase driven by strong performance in Europe (45%3) and Asia 96%3)
    more than offsetting UK VNB reduction (-22%)
Expenses -   Momentum on expense reduction has continued into 1Q14
-   Restructuring expenses 67% lower at £18 million (1Q13: £54 million)
Combined operating ratio -   Combined operating ratio of 97.7% (1Q13: 95.5%)
-   COR impacted by increased weather claims in Canada and the UK
Balance sheet -   IFRS net asset value increased 6% to 286p (FY13: 270p)
-   Pro forma4 economic capital5 surplus £7.8 billion (FY13: £8.3 billion)
-   Reduced external debt by £240 million in April 2014


1 Excludes Eurovita, Aseval and Malaysia.
2 Comparative has been restated to reflect changes in MCEV liquidity premium valuation and an extension of the MCEV covered business. See the basis of preparation in note 1 to the statistical supplement for details.
3 On a constant currency basis.
4 The pro forma economic capital surplus at 1Q14 includes the benefit of completing the Eurovita, Turkey GI, US asset management and South Korea transactions.
5 The economic capital surplus represents 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.


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About Aviva plc

Aviva provides 31.4 million customers* with insurance, savings and investment products. We are the largest general insurer and a leading life insurer in the UK*

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: 2013 Aviva plc annual report.