2024-03-07 14:11:12 ET
Aviva plc (AVVIY)
Q4 2023 Earnings Conference Call
March 7, 2024 03:30 ET
Company Participants
Amanda Blanc - Chief Executive Officer
Charlotte Jones - Chief Financial Officer
Conference Call Participants
Andrew Sinclair - Bank of America
Ashik Musaddi - Morgan Stanley
Nasib Ahmed - UBS
Rhea Shah - Deutsche Bank
Andrew Crean - Autonomous
Dominic O’Mahony - BNP Paribas Exane
Larissa Van Deventer - Barclays
Mandeep Jagpal - RBC Capital Markets
Thomas Bateman - Berenberg
William Hawkins - KBW
Steven Haywood - HSBC
Barrie Cornes - Panmure Gordon
Bingdi Fan - JPMorgan
Presentation
Amanda Blanc
Okay. Good morning, everyone and thank you for joining our Full Year 2023 Results Presentation. I’m delighted to welcome you to our new head office for the very first time. I hope you like it.
I’m going to start with a brief update on our full year performance, covering the highlights of today’s announcement before Charlotte is going to take you through our results in more detail, then I’ll update you on the strategic progress that we’re making and we’ll finish with an opportunity for any questions.
So before we do that, I want to set the scene with a broader view of what these results demonstrate. Our momentum. Aviva is moving faster than before. We’re delivering consistent quarter-on-quarter growth, strong and reliable earnings and cash generation, and we’re exceeding our targets. The credit for that goes to my Aviva colleagues for everything that they do to support our customers, whether that’s helping a family recover from a devastating flood claim, consolidating someone’s pension part to help them plan for retirement or developing a new service such as our Canadian auto care centers. Our people work tirelessly to help solve people’s – our customers’ financial puzzles. So a very big thank you to the whole of Aviva team. On top of strong performance today, we’re also investing for Aviva’s future. Our performance, together with these investments, gives us the confidence to upgrade our targets and our dividend guidance today and to announce our next £300 million share buyback.
So why are we so confident? While we continue to grow right across the business, in general insurance, premiums are up 13%, and we’ve had over £8.3 billion of net flows into our wealth business. We’re more efficient. Our costs were down 1% on last year, and that’s despite the difficult inflationary environment. We are more profitable with operating profit up 9% on the prior year. And this has translated into excellent cash remittances of almost £1.9 billion and a strong capital position. So this and the track record that we have worked hard to develop over the last 3 years shows that the business model that we have built brings resilience and opportunities and that we are pursuing the right strategy, which is centered around our customers.
It also reflects our consistent framework for deploying resources and managing performance across the group, and Charlotte will talk more about that in a minute. Executing that strategy have allowed us to deliver precisely what we said we would, strong and reliable momentum on both growth and performance, providing the confidence to invest in our future. We are already seeing the benefits of our £500 million investment in customer experience, growth and efficiency. We’ve grown our UK customer base by more than 470,000 in the past year and we are on track for the £100 million uplift in operating profit that we are committed to. And we have simplified the business, delivering £757 million of gross cost savings since 2018. We’re well positioned to accelerate our organic growth through further investment in the business, and we’re supplementing this with bolt-on M&A.
Our acquisition of the AIG UK protection book will bring more new customers to Aviva. In Canada, Optiom will strengthen our specialty lines business with a growing stream of distribution income. And earlier this week, we announced the acquisition of Probitas, a high-quality, fully integrated platform in the Lloyd’s market. This will expand the market opportunity for our global corporate and specialty business....
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Aviva plc (AVVIY) Q4 2023 Earnings Call Transcript