Aviva reports 6% rise in 2014 profits despite currency headwinds
Insurer Aviva reported a 6% rise in 2014 operating profit in the face of negative currency headwinds.
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The insurer made an operating profit of $2.17bn last year compared to a forecast of £2.15bn, which led to an increase in operating earnings per share by 10% to 47p from 42.6p in 2013.
These results show tangible progress, with key metrics moving in the right direction, said Mark Wilson, chief executive. “Operating expenses are £571m lower than our 2011 base-line, debt ratios are down and our full year combined ratio of 95.7% is the best in eight years,” he added.
The company said that expense reductions and an improved result in UK Life business, more than offset the negative impact of currency, lower individual annuity sales and disposals of some of the company’s non-core businesses which, together, had depressed operating profit by around £200m.
“Lower interest costs and corporate centre spend have also improved group profitability and there remains opportunity for further reductions in this area,” noted Wilson.
Aviva also said the value of new business grew 15% to a record £1.09bn from £904m in 2013. As such, the company declared a final dividend of 12.25p per share, up 30%, making a total dividend for the year of 18.1p per share.
Wilson however warned that Aviva had more work to do to complete a turnaround in its performance. "We have entered 2015 in a position of strength. Nevertheless, it would be wrong to assume that our turnaround is nearing completion as we have further to travel than the distance we have come," he said.