Aviva stated it is invested in the british isles “hook, line and sinker” after it unveiled forecast-beating 2011 profits and became the most significant general insurer in Britain.
Industry figures demonstrate that Aviva has overtaken Direct Line, the recently rebranded insurance division of Royal Bank of Scotland. Shares in Aviva closed up 5.6p at 356.8p.
Chief executive Andrew Moss, who took the helm in 2007, highlighted Aviva’s UK performance where profits climbed 8% to 1.45bn. It’s grabbed a larger share from the UK life and pensions market, now at 12%.
The group also won 400,000 new insurance customers, taking the total to greater than Two million, following the rollout of direct pricing to brokers along with the launch of that quotemehappy website. Still it lags behind Admiral, the second-biggest UK car insurer with 2.9 million customers, which reported rising profits on Wednesday, and Direct Line, Britain’s One car insurer.
Aviva is developing a phone app which may take the place of a telematics black box to reward the greater careful drivers by lessening their premiums. Aviva’s car premiums rose 13% this past year but growth slowed to single digits within the partner.
David Barral, leader of Aviva’s UK Life business, tweeted that Aviva is convinced of the UK “hook, line and sinker” and contains no offers move its hq. Aviva describes the UK, which contributes nearly half of the profits and where they have 14 million customers, because the cornerstone of the strategy.
Prudential said earlier this month it was considering moving its headquarters abroad, as a consequence of EU intentions to force insurers to keep more capital through regulation named Solvency II.
Aviva, which are operating in 21 countries (down from 30 2 years ago), beat City forecasts using a 6% improvement in operating profits to 2.5bn this season from continued operations. City analysts had pencilled in 2.4bn. Profit before tax slumped to 87m from 2.4bn, such as a 726m loss relating to its Dutch subsidiary Delta Lloyd. Aviva raised the bar again after beating all its operating targets next year.
Aviva’s eurozone debt exposure has fallen to 1.3bn from 1.6bn this season, comparable to 1% of shareholder assets. Aviva contains a big business in Italy and Spain, however it has zero experience Greece and Portugal and “very little” to Ireland, said Aviva’s finance chief Pat Regan. “We’re pretty confident with that level.”
Moss said conditions in Europe were “undoubtedly tough”. “People remain nervous in some of the people markets and that will affect sales, of unit-linked products, such as,” he said.
Asked regarding the eurozone debt crisis, Moss said there were a “sea change” because the European Central Bank started providing more liquidity for banks. “It’s perfectly clear that the politicians have a much better grip on what is happening. There are usually a handful of bumps inside road, but overall the trends are towards consensus and agreement.”
Moss said the corporation would proceed simplifying its portfolio. A year ago, it sold the RAC breakdown business for 1bn, further reduced its stake in Delta Lloyd to 43% and offloaded its Czech, Romanian, Hungarian and Slovakian operations.
Oriel Securities analyst Marcus Barnard said: “At first glance the best than expected couple of results, with plenty with the bulls and a second for any bears.” He said the dividend had fallen slightly short. Aviva are going to pay out 26p a share to shareholders, up just 2% from 2010 and below expectations of 26.8p.