Aviva Exceeds Expectations with Strong First-Half Results

Aviva, the British insurer and asset manager, has announced its first-half results, surpassing analyst expectations. Here are the key details:

Operating Profit

Aviva's group operating profit for the six months ended June 30 was £715 million ($908.5 million). This figure slightly exceeded the company-compiled consensus of £701 million, Aviva's own guidance of around £700 million, and the restated profit of £661 million reported for the same period the previous year.

Gross Written Premiums

The general insurance gross written premiums for Aviva came in at £5.27 billion. This amount exceeded the consensus estimate of £5.15 billion and was higher than the previous year's figure of £4.69 billion.

Solvency II Ratio

Aviva's solvency II cover ratio, which is a key measure of its capital strength, stood at 202%. This ratio was slightly higher than the consensus expectation of 199% and surpassed the ratio of 196% reported on March 31.

Key Highlights to Note

CSM Growth

Aviva's contractual service margin (CSM), a balance sheet liability representing expected future profits, increased to £6.64 billion for the first half. This amount was higher than the £6.46 billion recorded six months earlier and exceeded the £5.96 billion reported a year ago.

Impact of Canadian Fires

CEO Amanda Blanc addressed the impact of wildfires in Canada on Aviva's operations, stating that it had been modest. She assured stakeholders during a media call that the exposure to these fires was relatively small in the context of Aviva's Canadian business.

Capital Returns

Aviva has proposed an interim dividend of 11.1 pence per share, surpassing expectations of 11.0 pence. This marks an increase from the 10.3 pence payout made in the previous year.