Aviva share price jumps as value of new business rises 25%

on Aug 6, 2015
Updated: Oct 21, 2019

Shares in Aviva (LON:AV) have advanced this morning with the blue-chip insurance unveiling upbeat value of new business (VNB) numbers and lifting its interim dividend. The company also updated investors on the integration of Friends Life, acquired earlier this year, saying that it was progressing ahead of schedule.

As of 08:31 BST, Aviva’s share price had gained 1.33 percent to 534.50p, outperforming the benchmark FTSE 100 index, which has slipped into the red. The shares have gained just under 10 percent over the past year.
Aviva announced in a statement today that its VNB had climbed 25 percent to £534 million in the first half of the year, benefitting from strong performance at the company’s UK Life business. Including Friends Life, UK VNB came in 43 percent higher at £253 million. Aviva’s operating profit increased nine percent to £1.17 billion. The FTSE 100 insurer today hiked its interim dividend by 15 percent to 6.75p.

“After three years of turnaround we are now moving to a different phase of delivery,” Aviva’s chief executive Mark Wilson said in the statement, adding that the Friends Life integration was “ahead of schedule and we have delivered £63 million of run-rate synergies after three months”.
Aviva and former FTSE 100 peer Friends Life agreed a merger in December last year, in the wake of the UK government’s annuity reform which put pressure on pensions providers. Aviva noted in today’s statement that it expects “material capital synergies to arise in 2016 and 2017”.
In a separate statement, Aviva announced that it had inked a distribution deal with TSB, the challenger bank spun out of Lloyds Banking Group (LON:LLOY) and acquired by Spain’s Sabadell last month. The seven-year agreement covers the distribution of Aviva’s core general insurance products through TSB’s branch network.
As of 09:20 BST, Thursday, 06 August, Aviva plc share price is 534.75p.

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