Aviva 2002 Annual Report Download - page 20

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Group Chief Executive’s review
06 Aviva plc
Annual report + accounts 2002
Overview
Without doubt, 2002 was a very demanding year. Worldwide
economic uncertainty and falling equity markets contributed
to the toughest conditions I have experienced in 30 years in
the industry.
Yet we achieved a robust set of results. We took clear-sighted
decisions to ensure we remain financially strong and one of the
best-positioned companies in the market. Aviva is a resilient and
disciplined business with excellent prospects.
Group results
The testing economic environment inevitably had an impact on our
group financial performance. Under the circumstances, our pre-tax
operating profit†of £1,798 million (2001: £1,983 million) was a
good result.
Worldwide long-term savings new business sales held up well,
despite a loss of customer confidence in equity-backed
investments. Our sales fell by 2% to £14.6 billion (2001:
£15 billion), while life achieved operating profit was
£1,524 million (2001: £1,665 million).
Our general insurance business has been realigned over the
past three years through a clear and consistent strategy of
concentrating on more stable personal and selected commercial
lines and exiting the more volatile business. This helped us achieve
an excellent operating profit†of £959 million (2001: £924 million).
As a measure of how efficiently our business performs, we
achieved a combined operating ratio (COR)†of 101.4%,
which is better than our group target.
For the second consecutive year, falling global investment
markets resulted in a reduction in shareholders’ funds, which at
31 December 2002 stood at £9.7 billion (2001: £11.8 billion,
restated#). Nevertheless, our capital position remains sound,
with sufficient earnings to fully support growth in our existing
businesses.
We achieved a
robust set of
results.We took
clear-sighted
decisions to ensure
we remain
financially strong
and one of the
best-positioned
companies in the
market.
†From continuing and discontinued operations.
#Restated for the effect of Financial Reporting Standard 19
‘’Deferred Tax’’.