Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Aviva plc (AV): What Just Happened?

LONDON — Aviva Plc (ADR) (NYSE:AV)Aviva plc (LON:AV) is currently up over 6% on the release of an interim management statement for the first quarter, ending 31 March 2013.

Earlier this year, Aviva plc (LON:AV)’s CEO Mark Wilson set out his “investment thesis” for the company — “delivering cash flow and growth, in that order” — so this management statement represents the first report of work-in-progress toward that goal.

Operating capital generation — which Wilson describes as “a precursor to cash” — was “stable” at 0.5 billion pounds. Operating expenses were reduced by 10%, to 769 million pounds, although costs of 54 million pounds were incurred in restructuring the business, in large part due to redundancies. These costs are set to continue, as Aviva plc (LON:AV) aims to reduce its workforce by around 2,000 roles (6% of its global headcount).

The company reported an 18% increase in its key measure of growth, the value of new business. Growth was especially strong in Aviva plc (LON:AV)’s developed markets in the U.K. and France and also in Turkey and Asia, which saw increases of 67% and 29% respectively, but was described as “disappointing” in Spain and Italy, where the value of new business fell substantially.

Commenting on the statement, Wilson said:

In the first quarter we have taken steps to deliver our investment thesis of cash flow and growth. Our operating expenses are now 10% lower and we are on track to deliver our cost savings target of £400 million.

Our key measure of growth-value of new business-has increased by 18% driven by actions to improve profitability in UK Life and growth in our Asian business. In general insurance, our profitability was stable with a COR of 96% with a strong result in Canada. Net asset value has increased by 9% to 302 pence and our internal debt level has reduced by £300 million.

Today’s results demonstrate the first steps toward delivery. I am conscious of the challenges and do not want to set expectations at an unrealistic level. Progress so far has been satisfactory and there is a great deal more we need to do for our shareholders.

At 343 pence, Aviva plc (LON:AV)’s share price is now some way to recovering from its recent lows, which followed the company’s announcement of a swingeing 44% cut in its final dividend by at the beginning of March, but it still remains over 15% down so far this year.

The article Aviva Delivers 18% Growth in New Business originally appeared on

Jon does not own shares in Aviva plc (LON:AV). The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.