AVIVA ANNOUNCES £1.3BN PROFITS

Aviva, which employs around 6,000 people in Norwich, made ‘significant progress’ in 2009 says Group Chief Executive Andrew Moss.

The UK business continues to provide Aviva with a strong base and forms a significant part of the strategic growth plans for the business.

Aviva plc preliminary results for the year ended 31 December 2009

Strong financial performance reflects management actions

• Return to total profit: IFRS profit after tax £1,315m (FY08: £885m loss)
• Operating profit £2,022m on an IFRS basis (FY08: £2,297m); £3,483m on an MCEV basis (FY08: £3,367m)
• IGD solvency surplus more than doubled to £4.5bn (FY08: £2.0bn)
• Group return on equity 16.2% (2008: 11%)
• Total dividend per share of 24 pence

Proven strategy delivering results

• Reshaped composite portfolio: successful IPO of Delta Lloyd realised €1.1 billion; sale of subscale Australian life business for 16 times IFRS profits
• Strategic restructuring: sustainable cost savings target of £500m exceeded one year early; 19% global headcount reduction over two years
• Delivering for our customers: successful move to a single global brand; customer numbers up at 53 million and customer satisfaction increased

Clear plans to drive value, earnings and dividend

• Capitalise on leadership positions to grow our business, with a primary focus on UK and Europe
• Rigorous allocation of capital to deliver highest returns
• Build value in our customer franchise by exploiting global brand and expertise
• Grow our general insurance portfolio and lower our combined operating ratio
• Leverage improved investment performance to grow third party assets under management

Andrew Moss, group chief executive, commented:

“2009 was a year of significant progress for Aviva; a year of strong financial performance and delivery against our strategic plans. Against a challenging economic backdrop we focused on profitability and made clear choices to optimise our capital and reshape our portfolio through the successful IPO of Delta Lloyd and the sale of our Australian life business. We've taken out costs by creating simpler, more modern ways of doing business which reflect the changing way customers choose to deal with us.

“In driving Aviva forward we will retain our disciplined approach to capital and profitability. We expect the external environment to remain unpredictable for some time but are encouraged that we saw the first signs of an improved appetite to save among our customers in the final quarter of last year.

“We have a refreshed executive team and a clear strategy. We aim to grow our life and general insurance businesses profitably, increase third party assets under management and continue to maximise the benefits of being a single global group. As economies begin to recover we will seek to take market share based on the strength of our brand, products, distribution and customer franchise. We will improve our productivity by controlling costs as we grow, thus creating value for shareholders and our 53 million customers.”

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