Aviva half year results trebled
interim dividend up
With increased sales and margins boosted, thanks to cust cutting, Aviva half year results announcement on August 5th, 2010, reassured investors that the Group is back on track, whilst also announcing an inflation busting 6 per cent increase in the interim dividend to 9.5 pence.
Sales up, costs and COR down, dividends up!
Overall sales grew for the third consecutive quarter. With cost down, Aviva achieved a 21 per cent increase in operating profits.
Sales of long-term savings products such as retirement policies and life cover were up by 4 per cent to £20.2bn, with strong performance in Britain and Europe - the world's biggest life and pension market.
Aviva regards Europe as its main growth driver over the next five years.
IFRS operating profit of long-term savings products amounted to £1,12b million which was a 20 per cent increase on 1st half year, 2009.
General insurance and health business saw a 4 per cent profits fall to £525 million, while Aviva's fund management side generated operating profits of £56 million.
The all important "Combined Operating Ratio" ("COR") amounted to 97 per cent, beating Aviva's 98 per cent 'meet or beat' target.
COR is an all important insurance industry metrics which measures claims and expenses against premiums. Anything under 100 per cent is regarded as 'profit', i.e. an insurer is taking in more premiums than it's paying out.
Re-confirmation of July's investor presentation
Earlier in July, Aviva had already briefed investors on their commitment to bringing greater clarity to how it generates capital, how that is turned into cash and what it does with that cash.
At the time, chief executive Andrew Moss, commented:
"Our presentation demonstrates the scale and predictability of our capital generation and the diversity of our IFRS profits. This gives our results real resilience and provides a powerful base from which we pay dividends and invest in the profitable growth of the business."
Based on Aviva half year results, Andrew Moss comfortably announced that strong cash generation from the various parts of the group will allow Aviva to return to “sustainable and growing dividends”
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