Aviva, a leading international insurance group, has released its earnings results for the first half of 2022. According to the company’s interim management statement, Aviva reported a 14% decrease in underlying business operating profit to £2.2 billion (approximately $2.7 billion USD). The decline is attributed to a combination of factors, including the impact of COVID-19, inflation, and the Russia-Ukraine conflict.
Despite this, Aviva managed to maintain its solvency capital ratio at 165%, which is above the target of 155%. The group’s new business Embedded Value (EBIT) margin rose by 20 basis points to 14.2%, while cost savings initiatives and pricing improvements contributed to a 10% reduction in operating expenses.
Aviva’s insurance business reported a 12% increase in premium income to £4.3 billion (approximately $5.2 billion USD), driven by a 15% growth in new business sales and an 8% increase in in-force premiums. The company’s life insurance business saw a 10% decline in underlying operating profit, primarily due to the impact of COVID-19 and lower investment returns.
In its asset management segment, Aviva reported an 18% increase in assets under management (AUM) to £326 billion (approximately $397 billion USD), driven by strong net inflows and market performance. The group’s fixed income and multi-asset mandates saw significant growth, while its equities and alternative investments showed more modest increases.
Aviva’s CEO, Amanda Blanc, commented on the results, stating, “While the past six months have presented numerous challenges, we remain confident in our ability to adapt and thrive. Our focus on operational efficiency, strategic partnerships, and technical excellence has helped us navigate these challenges and position ourselves for long-term growth.”
Aviva’s CEO emphasized the company’s commitment to being a net-zero carbon business, aiming to reduce its own carbon footprint by half by 2025. The group has also launched several initiatives to support its customers and communities in their own climate change mitigation efforts.
Overall, while Aviva’s earnings results may not be as strong as some investors had hoped, the company’s continued efforts to diversify its product offerings, enhance its distribution channels, and reduce costs are expected to yield positive outcomes in the long run. With a strong balance sheet, robust financials, and a commitment to sustainability, Aviva remains a solid contender in the global insurance and financial services landscape.