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Insurer beats profits forecast

Aviva ready for next phase of growth says CEO Wilson

Mark Wilson AvivaAviva boss Mark Wilson said the insurer was moving into a new phase of growth and that its integration of Friends Life was ahead of schedule.

The chief executive has overseen a three-year turnaround strategy and today unveiled higher than expected operating profits boosted by the Friends Life acquisition and higher premiums in general insurance.

Operating profit was up 9% to £1.17 billion against £1.07bn in the comparative period last time and a consensus forecast of £1.09bn. New business rose 25% to £534 million.

Mr Wilson said: After three years of turnaround we are now moving to a different phase of delivery. We have improved the balance sheet, simplified the group and we are now transforming our business. The progress is evident in these results.

The Friends Life integration is ahead of schedule and we have delivered £63 million of run-rate synergies after three months. This is encouraging but nowhere near complete. Amidst the integration, our UK Life business continued to grow, with value of new business up 31% excluding Friends Life.

In general insurance, premiums and operating profits were higher. The combined ratio was 93.1%, the best in eight years, and underwriting profits increased 45%.

“The 15% increase in the dividend is a further step towards achieving our target payout ratio and underlines our confidence in our cash flow and the business.

The company has declared an interim dividend up 15% to 6.75p (HY14: 5.85p).

 

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