Read Amanda Blank’s video recording of the 2022 half-year results
Hi Amanda. Thank you so much for inviting me to talk to you today about the results.
How are you?
I’m fine thanks. Jenny, how are you?
I’m very well, thank you. So are we making the progress you would have hoped for at this point in the year?
Well, yes, I really think we are, Jenny. And this is largely thanks to the fantastic work done by you and all your colleagues at Aviva. And I can’t thank them enough for the hard work they’ve put in over the first six months of this year.
So, I think if I think back over the past period, we’ve made really good progress and there’s really good momentum in the business, and I think you can see that in the growth, in the insurance, in the growth of the capital business and the growth of the pension business, which , in my opinion, puts us in a very, very strong position.
We made some tough decisions two years ago when we refocused the portfolio, but I think you’re really starting to see the benefits of those decisions now impacting the performance of the business.
In addition, we are much better at managing business performance. I believe that the culture of productivity in business is very strong.
And while I know we’re in for a very challenging macro environment, Aviva is in a very, very good position to be able to deal with that, and I think we’re going to come out of it very strongly, and I’m very confident about that outlook.
It would be great to know what the highlights of the six months are for you.
So, when I think about the first half of the year, I think if we look at the sales performance of the company, it’s good. The company’s operating profit has also increased, which is a good indicator for us. And I attribute this to the diversified nature of the business.
We are in a strong competitive position as we hold the number one position in many of our product lines in the UK, Ireland and Canada.
And, of course, the capital position of the business is strong. Two things should be said here.
First, we announced today that the interim dividend is in line with the guidance we gave back in March, and second, we expect to launch share buybacks with full-year results in March 2023.
And I think, Jenny, that shows our confidence in the business.
So you talked about our four strategic priorities. Can you tell me a little bit about how we’re progressing in each one?
So. So, let’s talk about the client first.
So it’s clear that the customer is at the heart of what we do here at Aviva. We have over 18.5 million customers in the UK, Ireland and Canada. That’s a lot of customers to take care of, and we take that responsibility very seriously.
You will remember that in February this year in the UK we had three storms that happened very quickly and we received 19,000 claims from those storms and obviously our customers really needed us at that time and we were there for them and we were able to actually settle 10% of the claims on the first day, which I think is a real testament to our colleagues and also a testament to One Aviva because our Aviva Canada team was able to step in and help the UK team make sure we are able to do it. I was incredibly proud of it.
We’ve also made over 100 improvements to the MyAviva app and Aviva Connect, which is the brokerage app. And we’ve had over half a million new registrations on MyAviva in the last 12 months. So people are more involved with Aviva, which is obviously a good thing. The important reason is that if someone uses the MyAviva app, they are twice as likely to buy another Aviva product.
And the second priority direction is growth, and here we have also made significant progress.
We’ve grown in insurance, we’ve grown in wealth and we’ve grown in pensions, as you can see from the results we’ve released today.
So maybe just to delve into a few of those areas because we can’t just rely on our existing revenue streams, we have to look for new opportunities.
So, in commercial lines, we are expanding our regional underwriting footprint. We have improved our digital offering. In Canada, we launched a multinational offering for national companies. And in the wealth business, we’ve launched several new enhancements to the core trust offering.
And I was really excited last week when we announced the acquisition of Azur because it puts us at the top of the UK large cap market.
This is the launch of Aviva Zero, where we now have over 12,000 policies underwritten, I think that’s all really good evidence to show that Aviva is growing in our traditional areas as well as new revenue areas.
So our third priority area is efficiency, and as you saw today, our costs are down 2%. So this is really good news.
I think, especially when you look at this very high inflation environment that we’re operating in, so any cost reduction is obviously going to be difficult.
But the good news is that we are reaching the 750 million target we set in March this year.
We’re shrinking our IT platforms, simplifying them so they’re not so expensive. We are also looking at our product mix to simplify the number of products we have. And, of course, for us, maximum efficiency remains our absolute priority in every business direction.
And the last area, of course, is around sustainable development. And here we are making good progress. But in the last six months, we have really focused our attention on the cost of living crisis. And I think three things should be highlighted here. Firstly, we have set aside £15 million to support vulnerable businesses and vulnerable people in local communities as they go through what is, of course, an incredibly difficult time for them.
The second area is thinking about our customers and ensuring that we can provide them with affordable product offers as they make choices during this cost of living crisis.
And finally, our colleagues, last week we announced a one-off payment to support 7,000 of our colleagues during this difficult time.
Thank you, Amanda. That was a great insight.
What key messages would you like us to take out today?
So, Jenny, I think in summary we’d say we’ve had a great start to the year, but we’re well aware of how tough it is out there. It’s really hard.
But we are in a good position because we have several leading franchises.
If you look at our position in the UK, Ireland and Canada, we have a strong position. And we have a great brand.
And the work we did two years ago in developing the new strategy allowed us to benefit from it beautifully.
So, we are really confident that we can deliver on Aviva’s promise.
So, I guess I just want to close by thanking all of our colleagues for all the hard work they’ve put in over the past six months. I really, really appreciate it.
Thank you very much, Amanda. It was great talking to you today.
And thank you. I really liked it.