In its Q1 results, Aviva reported that General Insurance gross written premiums (GWP) were up 11% at constant currency to £2.4bn, driven by disciplined management of inflationary pressures and a balanced mix across personal and commercial lines, and across the UK, Ireland and Canada.
According to Aviva, UK&I GWP increased by 13% to £1.5bn, and Canadian GWP increased by 9% at constant currency to £0.8bn. Rate accounted for approximately half of the growth across the UK & Ireland and Canada, the firm explains.
Elsewhere, Insurance (Protection & Health) sales in Q1 were also up 11%, with strong growth in Health and Individual Protection.
Wealth net flows of £2.3bn represented 6% of opening assets under management, though were 15% lower than in Q1 of 2022 due to the impact of the challenging market volatility on Platform. Workplace net flows were up 25% to £1.8bn from £1.4bn in Q1 of 2022.
Meanwhile, Retirement (Annuities & Equity Release) sales were up 17%, driven by strong BPA and Individual Annuity performance. YTD BPA volumes including preferred provider schemes are £2.4bn.
Aviva also reported a solid Group combined operating ratio (COR) of 95.4%, presented on an undiscounted IFRS 17 basis.
The firm states that this performance reflects its pricing strength, continued disciplined response to inflation, and its risk selection and diversification within its portfolio.
The estimated Solvency II shareholder cover ratio of 196% was 16pp lower than the same quarter of 2022, as operating capital generated was more than offset by the impacts of the 2022 £576m final dividend, £300m share buyback, £75m pension scheme payment, and market movements.
Aviva says that its high-quality shareholder asset portfolio of £79.6bn (31st March) continues to perform well and is defensively positioned to withstand periods of volatility.
Further, the firm suggests it is on track to meet its cost reduction target (£750m by 2024) and to beat its own funds generation (£1.5bn p.a. by 2024) and cash remittance (>£5.4bn 2022-24) targets.
“Dividend guidance of c.£915m for 2023 with low-to-mid single-digit growth in the cash cost of the dividend thereafter, together with our intention for further regular and sustainable capital returns to shareholders, remain unchanged.” writes Aviva.
Amanda Blanc, Group Chief Executive Officer, commented, “We have delivered an encouraging start to 2023 and continue to build clear trading momentum. New business volumes are good, despite persistent economic uncertainty, and we delivered another quarter of strong growth across our diversified business.
“Private healthcare sales grew by 25%, as more individuals and companies are attracted to the benefits of private cover. The bulk purchase annuity market is very active due to the higher rate environment, and we have now completed over £2 billion of deals so far this year.
“Our workplace pensions business is also very buoyant, with flows up 25% due to 134 new scheme wins and higher wages feeding through to higher pension contributions.”
Blanc continued, “Our general insurance business goes from strength to strength. We have grown premiums 11% and maintained attractive levels of profitability, thanks to our disciplined management of inflationary pressures and our balanced mix across personal and commercial lines, and across the UK, Ireland and Canada.
“Aviva is uniquely placed to successfully navigate the prevailing economic environment, and we continue to support our customers through this challenging time. We have market-leading positions in high-growth areas.
“We are financially strong with an attractive and growing dividend, and we are confident in the prospects for Aviva.”
