Aviva reports 2016 operating profit of £3.0bn with UK growth
Aviva reported a 12% increase in operating profit to £3.01bn in 2016, with growth anchored by its UK life and general insurance franchises. The result a 3% rise in operating EPS to 51.1p, showing earnings progression alongside balance sheet resilience under Solvency II.
UK life operations delivered a material contribution, with Aviva Life & Pensions UK Limited reporting operating profit of £557m for 2016. Across the wider group, life insurance value of new business increased 13% in 2016, showing higher profitability on new life and pensions flows. Management said UK life growth was driven by Friends Life integration synergies together with positive momentum in protection, savings and individual annuities. The Friends Life acquisition, completed for £5.6bn in April 2015, provided the platform for these integration benefits to feed through the 2016 numbers.
Within the year, life insurance operating profit rose 20% to £1,226m in the first half, compared with £1,021m in the same period of 2015. Over the same period, life insurance value of new business increased 7% to £583m from £534m, indicating that higher volumes or an improved mix were already visible mid‑year. UK Life platform assets under management rose 23% to £10.3bn in the first half of 2016, up from £8.4bn at the end of 2015, highlighting the scale of flows into the platform proposition.
General insurance provided a second growth leg, with net written premiums up 15% to £8,211m in 2016 versus £7,171m in 2015. At the half‑year stage, general insurance net written premiums had already increased 7% to £3,991m compared with £3,678m in the first half of 2015, showing momentum across the book. This expansion in premium income sat alongside the broader uplift in group operating profit and earnings per share over the full year.
Fund management activities also scaled, with operating profit in that segment up 48% to £49m in the first half of 2016, compared with £33m a year earlier. This growth in fee‑based earnings complemented the insurance result, adding a diversified income stream to the group's operating profit base.
On capital, Aviva reported a Solvency II coverage ratio of 174% at the half‑year, compared with 180% at the end of 2015. The ratio remained well above 100%, providing a buffer while the group continued to integrate Friends Life and grow capital‑intensive lines such as annuities and protection.
Digital engagement metrics moved higher alongside the financials, with registrations on the MyAviva platform surpassing 3 million in the first half of 2016, up from 2.3 million at the end of 2015. The group described MyAviva registrations as a key leading indicator. Management linked customer engagement to future product cross‑sell and retention potential. The group achieved combined growth across life, general insurance and fund management under this leadership. The company maintained a Solvency II coverage ratio that remained well above regulatory minima. No specific timing has been set in these disclosures for any change in strategic direction beyond continued execution of the existing growth and integration agenda.
--- Sources: https://www.aviva.com https://www.slideshare.net/slideshow/aviva-plc-2016-results/73246780 https://www.aviva.com/newsroom/news-releases/2017/03/aviva-plc-2016-preliminary-results-announcement-17745/
