Aviva CEO on H1 results: ‘we saw really strong growth in first half’

Aviva plc (LON: AV) ended slightly up on Wednesday after reporting a year-on-year increase in its first-half operating profit.

Aviva saw its profit jump 8.0% in H1

The insurance company ended the first six months of this year with £715 million ($908.5 million) of operating profit – up 8.0% versus last year and some £14 million compared to the consensus.

Aviva attributed the strength in H1 to its personal as well as the commercial division. On CNBC’s “Squawk Box Europe”, CEO Amanda Blanc said today:

If our customers keep cash on the platform, we pay approx. 4.5% back to them. They might keep their money in cash whilst they’re looking at the market conditions and deciding what to do.

She also confirmed that the impact of Canadian wildfires has been modest. The multinational saw its gross written premiums climb from £4.69 billion to £5.27 billion as well (ahead of estimates).

Aviva’s expectations for the full year

Aviva said its solvency II ratio was 202% in the first half, as per the press release – a 600 basis points increase versus last year that helped beat expectations by 3.0%.

The British firm now forecasts its full-year operating profit to grow by up to 7.0%. According to CEO Blanc:

Concerns around waiting times in the NHS coming through into our health insurance numbers. On individual protection, we saw really strong growth in the first half.

Aviva now expects to surpass its medium-term growth targets. On Wednesday, it raised its interim dividend as well by 8.0% to 11.1 pence per share.

Aviva is open to acquisitions

Aviva plc is interested in making acquisitions to expand its footprint in commercial insurance and enter the Lloyd’s insurance market.

Note that commercial insurance currently accounts for half of its general insurance business. Commenting on the rising focus on weight-loss drugs, CEO Amanda Blanc said:

We’re watching that sector very carefully. Our actuaries are all over those numbers, as you would expect, and we’re looking with interest to see what the developments there are going to be.

Shares of Aviva plc are currently down about 15% versus their year-to-date high.