Aviva 2013 Annual Report Download - page 260

Aviva plc
Annual report and accounts 2013
258
Financial and operating performance continued
Net written premiums were £433 million, down £35 million, or
7% (2011: £468 million) driven by lower unit-linked and
pensions sales. General insurance sales were stable at £65
million (2011: £65 million).
Adjusted operating profit for long-term insurance and
savings business in 2012 was £153 million (2011: £167 million),
a decrease of £14 million or 8%. General insurance adjusted
operating profit increased by £14 million to £9 million (2011:
£5 million loss). Profit before tax attributable to shareholders’
profits was £176 million, an increase of £19 million, or 12%
(2011: £157 million).
Italy, Spain and Other
The table below presents sales, net written premiums,
adjusted operating profit and profit before tax attributable to
shareholders’ profits under IFRS from our operations in Italy,
Spain and Other for the three years ended 31 December 2013,
2012 and 2011.
2013
£m
2012
£m
2011
£m
Sales
Long-term insurance and savings business
Spain 1,224 1,295 1,926
Italy 2,235 1,971 2,993
Other 544 470 511
Total long-term insurance and savings business 4,003 3,736 5,430
General insurance and health
Italy & Other 427 446 508
Total sales 4,430 4,182 5,938
IFRS net written premiums 3,193 3,036 4,592
Adjusted operating profit before tax
Long-term insurance and savings business
Spain 150 215 216
Italy 142 159 140
Other 10 7 4
302 381 360
General insurance and health – Italy & other 19 (6) (47)
Other operations (7) (10) (21)
Total adjusted operating profit before tax 314 365 292
Profit/(loss) before tax attributable to
shareholders’ profits 509 273 (95)
Year ended 31 December 2013
Total long-term insurance and savings sales increased by £267
million, or 7%, to £4,003 million (2012: £3,736 million).
In Italy, life sales increased by £264 million, or 13%, to
£2,235 million (2012: £1,971 million) driven by higher sales of
unit-linked and with-profits products.
In Spain, life sales decreased by £71 million, or 5%, to
£1,224 million (2012: £1,295 million) mainly reflecting the
disposal of Aseval in April 2013.
Other life sales, which mainly includes sales in our Turkey
Life joint venture, increased £74 million, or 16%, to £544
million (2012: £470 million).
General insurance sales decreased by £19 million, or 4%, to
£427 million (2012: £446 million) driven by lower sales in
Turkey. Premiums in Italy were stable.
Net written premiums for the segment increased £157
million, or 5%, to £3,193 million (2012: £3,036 million) for the
reasons described above.
Total adjusted operating profit decreased £51 million, or
14%, to £314 million (2012: £365 million). This was mainly due
to lower life profits in Spain (mainly reflecting the Aseval
disposal) and Italy, partly offset by higher general insurance
profits.
Profit before tax attributable to shareholders’ profits was
£509 million (2012: £273 million). This includes adjusted
operating profits, positive life investment variances of £267
million (2012: £nil) arising from narrowing spreads on
government and corporate bonds and a goodwill impairment
charge of £48 million (2012: £108 million charge).
Year ended 31 December 2012
Total long-term insurance and savings fell by £1,694 million,
31% to £3,736 million (2011: £5,430 million).
In Italy, lower savings and protection sales reflected the
challenging conditions and decreased by £1,022 million, or
34%, to £1,971 million (2011: £2,993 million).
In Spain, life sales decreased by £631 million, or 33%, to
£1,295 million (2011: £1,926 million) reflecting the continued
tough economic conditions.
Our general insurance and health sales decreased by £62
million, or 12%, to £446 million (2011: £508 million). The
decrease was driven by Italy where credit protection sales fell
reflecting low levels of loan activity by partner banks and motor
sales were also lower.
Net written premiums for the segment decreased £1,556
million, or 34%, to £3,036 million (2011: £4,592 million) due to
lower sales as described above.
Total adjusted operating profit increased £73 million, or
25%, to £365 million (2011: £292 million).
General insurance and health adjusted operating loss
improved by £41 million to £6 million loss (2011: £47 million
loss) driven mainly by the Italian business which saw its
combined operating ratio fall below 100%.
The profit before tax attributable to shareholders’ profits
was £273 million (2011: £95 million loss). In 2012, adjusted
operating profits were higher as described above, and there
were also favourable investment variances of £43 million (2011:
£345 million negative variances).
Canada
The table below presents sales, net written premiums, adjusted
operating profit and IFRS profit before tax attributable to
shareholders for the three years ended 31 December 2013,
2012 and 2011.
2013
£m
Restated1
2012
£m
Restated1
2011
£m
Sales/IFRS net written premiums 2,250 2,176 2,083
Adjusted operating profit before tax
General insurance 246 277 256
Other operations — — —
Total adjusted operating profit before tax 246 277 256
Profit before tax attributable to
shareholders' profits 104 245 299
1 Restated for the adoption of IAS19. See note 1 for further details.
Year ended 31 December 2013
General insurance net written premiums increased by 3% to
£2,250 million (2012: £2,176 million) driven by rating increases
in personal and commercial property and growth in new
business volumes across most lines.
Adjusted operating profit was £246 million (2012: £277
million), an 11% reduction compared to the prior year. The
reduction was driven by a negative £62 million impact from the
severe flooding in Alberta and Toronto during the year (there
was also a further adverse impact of £67 million from these
floods in the results of our internal reinsurance business – see
“other group activities” below), partly offset by lower expenses
and favourable prior year reserve development. Long-term
investment return was down £11 million to £135 million
reflecting lower reinvestment yields.
Profit before tax attributable to shareholders was £104
million (2012: £245 million), reflecting the lower operating
profits and negative short-term investment variances of £122
million (2012: £10 million negative).
Year ended 31 December 2012
General insurance sales in Canada increased by £93 million,
or 4%, to £2,176 million (2011: £2,083 million), due to a