Aviva Posts Earnings Gain in Spite of Euro Crisis

Aviva (LSEAV.), Britain’s largest provider of general and life insurance, posted a 6% gain in earnings today as the company released its financial results for 2011.  The company reported an operating profit of £2.5bn for 2011, outperforming analysts’ predictions of £2.41bn.  Furthermore, capital surpluses within the Insurance Groups Directive, an important measure of capital stability for European insurance companies, rose from £2.2bn at the end of 2011, to £3.3bn as of February 29th.

This news comes just months after the company came under scrutiny for losing roughly 30% of its’ capital surpluses due to ongoing uncertainty in the Eurozone.

“Despite challenging market conditions we have beaten all our operating targets. We have made good strategic progress, focusing on markets where we will grow and earn higher returns.  Aviva continues to perform well, even in tough times,”said Chief Executive Andrew Moss.

In spite of a strong earnings performance, analysts were underwhelmed with Aviva’s dividend. While it rose 2% to 26p in 2011 compared to 25.5p the year before, analysts had expected a 5% rise. Moss called the modest increase a “measured reaction” to continuing uncertainty.

Cautious Optimism

While 2011’s results indicate a strong performance in uncertain times, Aviva still has reason for concern in the coming year as the Eurozone crisis continues to unfold, with the potential to adversely affect sales in the market. 40% of Aviva’s revenues are generated from mainland Europe, and the company has made far more inroads to the European market than its’ British competitors in the insurance industry.

In spite of uncertainty, Moss is cautiously optimistic of 2012’s prospects: both Europe’s, and Aviva’s. “There are going to be a few bumps in the road, I’m sure, but the overall trend is towards agreement and resolution,” stated Moss. “Looking to 2012, we have increased our operating targets underlining our confidence in Aviva’s continued success,” he added.

Highlights

• New business internal rate of return increased to 14.4%.
• Life insurance operating profit rose 7% to £2.1bn.
• UK life and pensions profits rose 8% to £920m.
• Dividend rose 2% to 26p

Company Spotlight

Aviva plc is the U.K.’s largest insurer, and among Europe’s market leaders in general and life insurance, and pension services.  The company has 36,000 employees serving 43 million customers worldwide.  Aviva’s shares on the London Stock Exchange were up 2.59% to 360.3p as of 12:58 GMT.

References
↑ Company Website

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

WHAT IS ADVFN?

ADVFN covers all things stock market.

From the news and opinion pieces on pages like this to share discussion forums, charting tools, financials, live share prices and Level 2, order book data

If you trade or invest ADVFN has the tools you need to make the right decisions.

• 

  101 Ways to Pick Stock Market Winners

  You need the number one bestselling investment guide, the definitive text for day traders, investors and stock pickers.

• 

  The Death of Wealth

  Dissecting the global economy and the financial markets, the book lays out the evidence for the next economic game changer: the Death of Wealth.

• 

  Kiana Danial

• 

  Glenmore Investments

• 

  Anton F Balint

• 

  Beth Anne Lamar