Aviva has reported an 18% increase in health and protection new business in 2023 when compared to the first nine months of last year.
The insurer’s trading update for the third quarter of the year, released this morning, showed the protection and health value of new business (VNB) grew by 18% to £168m, compared with £142m in the first nine months of last year.
Aviva attributed the growth to higher volumes in individual protection and health which was partly offset by higher interest rates which negatively affects VNB in protection.
Overall protection and health sales were up 23%, hitting £330m compared to £268m in the first nine months of last year.
Health sales were up 56% to £123m supported by strong performance with corporate clients, while individual protection sales grew 17% to £115m.
Aviva noted, however, that trading conditions are becoming more challenging as indicated by recent subdued mortgage market data. Group protection sales growth was more muted at just 1% hitting £92m.
Annual premium equivalent (APE) for individual protection rose 12% from £35m to £39m in Q3 2023, with group protection APE up 13% from £27m to £31m and health APE up 47% from £25m to £37m.
Overall, protection and health APE rose 22% from £87m to £107m.
Touching on its previously announced £460m acquisition of AIG’s UK protection business, Aviva said the deal would accelerate its growth in the “attractive” UK protection market and continue its progress in repositioning the group towards capital-light growth.
The acquisition, which it confirmed is expected to close in H1 2024, will broaden distribution, add more than 2.5m customers across individual and group protection, and deliver “significant capital and expense synergies” it added.
Amanda Blanc, group CEO at Aviva, said: “Aviva has delivered nine months of strong growth. We have clear trading momentum, driven by our uniquely diversified business, as well as our leading positions in growing markets.
“We have continued to expand our capital-light businesses, which now make up over half of our portfolio. We see significant opportunities to generate further higher return, capital-light growth in the future as we prioritise these segments.”
Blanc further described the group’s prospect as “very positive”.
“We expect to beat our medium-term financial targets and, in line with previous guidance, grow operating profit by 5-7% this year, despite higher weather-related claims,” she continued.
“I am extremely confident that Aviva will continue to deliver more for shareholders, and we reiterate our guidance for a total dividend of c.33.4p for 2023, and further regular and sustainable returns of surplus capital.”
