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15% rise in dividend

Aviva ‘stronger and more focused’ as profits surge

AvivaAviva reported a 20% surge in operating profits to £2.7 billion, attributed in part to its acquisition of Friends Life.  The figure beat expectations and the shares rose 19p in early trade.

Operating earnings per share increased 2% to 49.2p, despite the company facing strong foreign exchange headwinds. The value of new life insurance business was 24% higher.

The insurer also revealed it was expecting £1.2bn in capital benefits from the integration of Friends Life, and had already made £168m out of the £225m integration savings previously promised.

Group chief executive Mark Wilson said: “2015 was about stability and growth at Aviva, against a background of market volatility and uncertainty. Aviva is now a stronger and more focused business. We have completed the fix phase of our transformation.

“Our balance sheet is one of the strongest and most resilient in the UK market. Over the last four years, we have tripled our economic capital surplus.

“The integration of the £6bn Friends Life acquisition has gone faster and better than expected. We expect to achieve our target of £225m integration synergies in 2016, one year ahead of schedule. After nine months, we have achieved run-rate synergies of £168m and expect £1.2bn of capital benefits, £400m of which we have realised in 2015.

“Operating profits are up 20% to £2.7bn, and the value of new business increased 24%, representing 12 consecutive quarters of growth. The combined ratio in our general insurance business improved to 94.6%, the best in nine years, despite the recent floods, and Aviva Investors grew fund management profits by 33% to £105m.”

The company is proposing a final dividend of 14.5p (12.25p) making a total for the year of 20.8p (18.1p), a rise of 15%.

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