General insurance puts spring into Aviva’s step as profits and divi jump

● Boss says he has simpified business into ‘oaks, acorns and apple trees’

Aviva’s mainly Scottish-based general insurance arm has turned in its best performance in 11 years to help drive a steep rise in 2017 first-half profits.

The general insurance and health division, employing 2,500 at Perth and Bishopbriggs, also benefited from the acquisition of RBC Insurance Canada last year to boost profits 25 per cent to £417 million.

There were also some foreign exchange gains. It came as Aviva said yesterday that overall group operating profit rose 11 per cent to £1.46 billion – the fourth consecutive year of growth under chief executive Mark Wilson.

It came as the insurer also announced that it will continue as the main sponsor of Premiership Rugby in the UK for another year to the end of the 2017-18 season, its eighth season of sponsorship.

Tom Daniell, Aviva’s retail marketing director, said: “With record numbers of both attendances and live TV audiences, the league is going from strength to strength and we’re very much looking forward to the upcoming season.”

Life insurance operating profit grew 8 per cent to £1.3bn after it saw double-digit growth in long-term savings, protection and annuities and equity release.

Wilson, also unveiling a 13 per cent rise in the interim dividend to 8.4p, said the upbeat performance was due to the company “getting the basics right”.

He said: “We are growing and investing in the UK. We have grown top-line sales and bottom-line profit in UK general insurance, pensions, annuities and protection. Our digital business continues to make progress, making insurance simpler and more convenient for customers.”

Net written premiums in the general insurance business lifted 17 per cent to £4.68bn, while the value of new business rose 27 per cent to £596m.

The general insurance underwriting result rose 50 per cent to £244m, up from £163m in the same period last year. Digital general insurance premiums grew 13 per cent.

Aviva Investors, the fund management division, boosted operating profits 45 per cent. Wilson said Aviva’s businesses were divided into “oaks, acorns and apple trees”.

Oaks were continually profitable, acorns were about securing long-term growth (as in acquiring 100 per cent of its Vietnamese business), and apple trees required streamlining, which included largely withdrawing from Spain in the first half.

Nicholas Hyett, analyst at Hargreaves Lansdown, said: “Aviva has put its house in order and is generating healthy organic growth.”