Aviva’s protection sales in H1 2024 were broadly unchanged from the same period last year as group risk increases were cancelled out by individual protection falls.
Meanwhile in-force health premiums rose 10% but higher claims costs resulted in a £9m fall in operating profit for the health business.
The insurer’s half-year 2024 financial results revealed that protection sales were consistent with the prior period as growth in group protection was offset by lower individual protection sales.
With the acquisition of AIG Life UK, protection sales were up 49% for the period to £205m – including AIG sales.
Operating profit for protection was up 31% to £46m.
Health sales declined by 23% compared to the first six months of 2023, but Aviva said the decline was expected, due to the strong performance a year ago following the exit of another provider from the market.
In-force health premiums over the period increased by 10% to £895m. However, operating profit for health insurance fell by £9m (28%) to £23m as rising claims costs hit the operation.
“Normalisation of claims post-pandemic and adverse claims experience more than offset portfolio growth,” it said.
Gross written premiums (GWP) for health and protection combined totalled £15bn representing growth of up 10% per annum, driven by NHS pressures, a corporate focus on wellbeing and the property market, the insurer added.
Aviva said it anticipated further growth for the health business in the second half of the year, while protection growth was expected to moderate.
Profit up 57%
Overall, profit after tax for the Aviva group was up 57% to £654m from £415m.
In a media call coinciding with the release of the results early this morning, Aviva Group CEO, Amanda Blanc, said it had been “another six months of excellent progress.”
Blanc said: “Sales are up. Operating profit is up. The dividend is up. Our plan to deliver more for customers and shareholders is working really well.”
Operating profit for the first six months of 2024 increased to £875m, up 14% from £765m for the same period in 2023.
“We have achieved another six months of excellent trading,” Blanc said.
The insurer also added 270,000 more customers this year and 4.9 million UK customers have more than one policy with it.
UK political stability
Noting the advantages of political and economic stability in the UK market, Blanc said: “We’ve got to be optimistic about the future of the UK.”
She continued: “Trading conditions across the UK, Ireland and Canada, are excellent.
“And the UK market, our largest, is highly attractive and growing. We see many reasons to invest here, including greater economic stability and political certainty.
“This encouraging backdrop – and Aviva’s continued strong financial performance – means we are increasingly confident we can deliver even more for our customers and shareholders.”
And Aviva said it remained confident in meeting group targets outlined in 2023, including achieving operating profit of £2bn by 2026.
Strong trading momentum
Doug Brown, CEO Aviva insurance, wealth and retirement, said: “We have yet again delivered another set of excellent results across our insurance, wealth and retirement business, with continued strong trading momentum across all areas in the first half of 2024.
“Overall sales are up 12%, delivering a 16% year-on-year increase in value of new business, with operating profit up 9%.
“In insurance, protection sales were boosted by the acquisition of AIG Life in April, while health in-force premiums grew 10%, driven by strong new business sales and continued price discipline.
“We remain wholly focused on delivering our strategy and expect to see continued growth in the second half of the year.
“We’re on track to complete our three-year ambition of £15-20bn of BPA volumes and we are well positioned to further grow our capital-light businesses, in particular in the wealth market.”