Aviva posts ‘steady’ first half and mulls sale of Asian arm
Operating profits were up despite challenging conditions.
Insurer Aviva hailed a “steady” performance against a turbulent backdrop in the first half of the year, as it signalled a possible sale of its Asian business.
The company said operating profit for the six months to the end of June was up 1% to £1.45 billion, while operating earnings per share ticked up 2% to 27.3p.
This came during a period which chief executive Maurice Tulloch said was “characterised by a challenging economic and political backdrop and significant levels of organisational and leadership change”.
He also announced that the company would review options for its Asian business.
“Our Asian operations are strategically and financially attractive, however, we are evaluating a range of options to enhance the value of the businesses to shareholders,” he said.
It comes a week after Reuters reported that the insurer was mulling a sale of the Asian unit, with a possible value of up to two billion US dollars (£1.64 billion).
First half performance was “mixed”, but the board approved a 2% increase in the dividend to 9.5p per share.
Operating profits in life insurance and asset management were both down, falling 8% and 18% respectively.
Life insurance performance was impacted in the UK by the competitive market, leading to lower new business volumes.
But general insurance saw a 29% rise in operating profit.
Looking ahead, Aviva said the challenging macro backdrop was expected to persist in the second half, including a softer outlook for economic growth in Europe and the UK.
In June, the company announced that it would axe 1,800 jobs to cut costs, just a few months into Mr Tulloch’s tenure following his appointment in March.