Aviva 1st Half Headline Operating Profit +13%; Well Insulated From External Events

By Ian Walker

LONDON--Insurer Aviva PLC (AV.LN) Thursday reported a 13% rise in headline operating profit, raised its dividend, and said the company is well insulated from external events.

The 300-year old company, which has businesses across 16 markets in the U.K., Europe, Asia and Canada, said that it remains confident in its ability to deliver on key commitments to grow earnings, cash and dividends. At the time of its capital markets day last month Aviva set out a target to grow operating profit by a "mid-single digit" in the medium term and said it plans to pay 50% of operating earnings per share in 2017.

Aviva said its solvency II capital surplus--a measure of financial stability--slipped to 9.5 billion pounds ($12.64 billion), from GBP9.7 billion a year earlier. Its net asset value rose to 5.6% to 412 pence.

The company, which is the world's sixth-largest insurance company measured by net premium income, had a solvency II ratio of 174%.

For the half year ended June 30, 2016, Aviva made an operating profit, which strips out exceptional and other one-off items, of GBP1.33 billion, compared with GBP1.17 billion a year earlier.

The board has raised the interim dividend by 9.9% to 7.42 pence a share.

The value of new business rose 9% to GBP583 million, Aviva said.

Shares closed Wednesday at 385 pence. They are currently down 26% over the past 12 months.

Write to Ian Walker at [e-mail]; @IanWalk40289749

(END) Dow Jones Newswires

August 04, 2016 02:57 ET (06:57 GMT)

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