Aviva posts record £3.2bn operating profit

Aviva posted record full year profits on Thursday as general insurance sales increased and said it could withstand the impact of the coronavirus.

The insurer and investment firm reported a return on equity of 14.3% and 6% rise in operating profit to £3.2bn as the dividend was lifted by 3% to 30.9 pence per share.

Pre-tax profits on an IFRS basis rose to £3.37bn from £2.12bn. Aviva said general insurance sales rose 2% to £9.3bn, adding that the outlook was positive in the majority of its markets.

“In our major life businesses, we have increased customer net inflows and grown assets by 9% to £417bn. Aviva Investors secured third party net inflows of £2.3bn on the back of strong investment performance,” the company said.

“So far 2020 has brought significant uncertainty, compounded by COVID-19, in relation to macro trends including the level of interest rates, investment market volatility and foreign exchange. However, we have a strong and resilient balance sheet that is designed to withstand volatility.”

Hargreaves Lansdown analyst Nicholas Hyett said the results were "impressive" with cost control driving thie company's outperformance with "good news on the revenue front too".

"Aviva Investors is attracting new assets, premiums are up in general insurance ... and inflows are rising in the life and savings business. The net result of all that is a very healthy solvency position which gives the business options," he said.

"However, if we had a gripe with Aviva before today it’s that the path to growth beyond improved efficiency is unclear, and we’re not sure these results put that to rest. Despite significant streamlining over recent years the current set up still feels like a collection of well performing but disparate businesses.”