Aviva share price: Insurer reports rise in new business
iNVEZZ.com, Thursday, October 30: Aviva (LON:AV) today released an interim management statement for the nine months to September 30.
The UK’s second-biggest insurer by market value reported a continued upward momentum in its key metrics in the period, with new business rising 15 percent to £690 million from £619 million a year ago.
An eight percent decline in the value of new business from continuing operations in the UK was more than offset by a 33 percent rise in France, a similar increase in Poland, a 26 percent boost in Italy, Spain and Turkey combined, and a 36 percent jump in Asia.
Protection products were the largest new business contributor, making up 36 percent of the figure, while new annuities business — which was hit by changes in the UK designed to give people more choice over how they invest their pension pots — slipped to 20 percent of the total, down from 32 percent a year ago.
The UK life business had returned to growth in the third quarter, with the value of new business up 18 percent to £120 million, Aviva said. Net asset value rose 10 percent and the general insurance combined ratio — which measures claims as a proportion of premiums and is used to gauge the profitability of insurers — improved to 95.9 percent over the past nine months, from 96.9 percent in the same period last year.
Aviva CEO Mark Wilson said in the group’s statement: “Notwithstanding this progress, there is still more to do before we can be satisfied we are fully delivering on our investment thesis of cash flow plus growth.” He added: “Whilst the economic and regulatory environment remains challenging, we are in an entirely different position to where we were a few years ago. Aviva is starting to demonstrate consistency in its results and our focus remains on addressing our outstanding issues and completing the turnaround.”
The company noted the recent market volatility, which it said was “a reminder of the global economic uncertainty that still exists”.
Broker Shore Capital praised the progress made on the cost base, but said bulls of the stock “may be disappointed that the overall pace of improvements has slowed”.
“Our fear remains that the market has assumed a steeply sloped and linear pace of turnaround…this IMS demonstrates progress, but at a treacle like pace. The long grind continues,” Shore Capital remarked.
*h*Stock heads south after higher start*h*
Aviva’ share price opened higher this morning, but by 09:55 GMT, it had declined 0.97 percent to 511.50p.
Of the 20 analysts projecting 12 month price targets for the FTSE 100 constituent for the Financial Times, the median target is 577.50p, with a high estimate of 650.00p and a low of 442.00p.
According to the FT, as of 25 October 2014, the consensus forecast amongst 37 polled investment analysts covering Aviva has it that investors should hold their position in the company
**As of 09:41 GMT, buy Aviva shares at 513.50p.**
**As of 09:41 GMT, sell Aviva shares at 513.00p.**
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