Aviva Share Discussion Threads

[geckotheglorious] 20/12/2023 12:25

Yump
Post 18357
"I'm not sure how you can improve diversity without discriminating, unless you do it accidentally on purpose"


Easy.

Just hire the person best qualified/capable for the job!

Clue - It wont always be whitey! Despite UK being 85% White.

[engelbert1969] 20/12/2023 12:16

Thanks cjac. Very reassuring.

[dope007] 20/12/2023 12:07

Inflation falling

OFGEM - hold my beer!!!

[xongkudu] 20/12/2023 12:02

CJ

Great post.

Many thanks.

[cjac39] 20/12/2023 11:54

I thought I would have a spin through the recent Av results to check my views on how they are doing. A few comments from this:
Sometimes I forget what an incredible array of market leading businesses sit within AV: #1 franchise in UK GI (10% market share); #2 in Canada; #2 in protection and by a country mile #1 in workplace schemes.
A simple metric for insurers (forget all the IFRS17 nonsense) is own funds. For Aviva this is 15.4bln. Care needs to be taken with this as it includes subdebt as an add back. Ie they deduct subdebt as a liability in own funds and then add it back in.
Presently 4.8 subdebt so net OF of 10.6bln. If you were going to be super accurate you might net out the risk margin and TMTP as not really liabilities but with interest rates much higher and S2 changes afoot these are much less material nowadays albeit it’s a net £1.1bln. Ie a basic book value of £11.7bln compared to todays mcap of …. £11.7bln (a coincidence).
This own funds is a technical valuation which ascribes no goodwill for any of their market leading businesses. How much one would add for this is somewhat of a subjective thing to guess at.
Life insurers tend to trade at 80-90% of own funds for complicated things like with profits vs annuities trading at closer to OF and with their BPA franchise most likely above this level (PIC is for sale and think they are going to get > OF and the annuities dominate the WP value in Aviva).
BUT GI businesses most certainly of the type they own would trade hugely above OF. Hiscox for eg trades at 3.7bln vs OF of 2.1 (76% premium); DL is more highly valued at 2.5 vs OF 1.3 or 92% premium.
DL earned £3.1bln of gross premiums in 2022 (and made a loss). AV wrote £3.2bln in UK&I in H1 2023 plus £2.1bln in Canada and at CORs or 96% and 93% respectively (ie they made money). So a simple read across might be tempting as Aviva is 5.3 H1 GWP * 2 /3.1 DL GWP * DL mkt cap which imputes a mkt cap of its GI biz of £8.5bln.
This isn’t a goodwill valuation as the GI biz holds own funds which I don’t think is separately disclosed but using an average of the hiscox and DL valuation you might therefore arrive at a goodwill valuation of £3.9bln.
Lets ignore all else (BPA, workplace, eq release) and therefore ascribe a reasonable book value with a bit added for GI as 15.6bln. So presently we are paying maybe 75% of “book” for our shares.
Aviva is though a behemoth of enormous expensive staff cost base so do we expect to generate a reasonable return on our invested book value and goodwill? Surprisingly things look not too bad here as well. Not US compounder territory but if we think we’ve paid 75% of “book” and we then generate an organic return of 13.2% (adjusted for excess capital) or even 10.8% fully loaded then this implies a potential BV adjusted return of nearer 15.6%. You would easily pay >150% of book to buy a US equivalent with these returns.
They still haven’t really optimised bs investments in the way L&G have but as we have seen are exploiting M&A opps quite selectively as well.
Personally, I don’t like the focus on cap light vs cap intensive businesses but I think this is borne out of a large low return with profit heritage fund. The opportunities in front of Aviva for cap intensive BPA in UK are enormous and underexploited in my view together with all the more trendy GI, digital activities. A comfortable hold though in summary.

[spawny100] 20/12/2023 09:03

Limp wristed AV more like Xong - most in my portfolio are flying today.

[kasamavic] 20/12/2023 08:48

What's the chances of this being flat or lower at the end of the day. If past performance is anything to go by, every chance.:)

[xongkudu] 20/12/2023 08:00

Yes…Dow had a good day. Our economic figures looking much stronger. Pre -Christmas rally time.

Let’s see how our limp waisted FTSE reacts to it all. whimper whimper…no doubt.

[muscletrade] 20/12/2023 07:39

UK 10 year now dipped to January 2023 levels on the back of the inflation figures and UK futures looking pretty good.

[muscletrade] 20/12/2023 07:09

Reasonably positive UK inflation figures just out which is encouraging and sterling dipped accordingly, while UK futures increased.

[yump] 19/12/2023 17:37

I'm not sure how you can improve diversity without discriminating, unless you do it accidentally on purpose.

We really have got into a sticky state with all the culture stuff. Cancelling history is in the same area, but I'm sure the protagonists would be offended if you said they were on an agenda that is not much different from China, or any other country that removes the historical bits it doesn't like, so they 'disappear'.

[mountpleasant] 19/12/2023 16:44

In UK papers today ...

"High-flying Chris Palmer was turned down from the £80,000 post at a financial services company after bosses highlighted concerns about his 'arrogance' and instead opted to hire a woman.

At an employment tribunal, Mr Palmer said his failure to get the job was based on his ethnicity and gender following the remark from managing director, Michael Jones, with the spurned jobseeker accusing the finance firm of 'going through the motions'.

But, the panel dismissed his claims - which the hearing heard had been branded 'absurd' - ruling it was not 'indicative of an intention to discriminate' when an employer mentioned its aim to improve diversity in an underrepresented workforce"

[engelbert1969] 19/12/2023 16:28

I haven't seen the half of it as I already have the main protagonist filtered.

[whatsup32] 19/12/2023 16:07

eurofox. With respect it’s hardly Spuds fault , it was right to show some leeway over Christmas period (there’s only so much to talk re Av)

So stick around show some leeway yourself and let’s all see Av elevate like RR

[eurofox] 19/12/2023 15:45

This is out of control spud, not bothering any more

[spud] 19/12/2023 12:25

Right guys, let's get back on track please - Comments like that of #18346 won't be tolerated either.

Spud

[tuftymatt] 19/12/2023 12:11

Fair value of 727p mentioned!!

Good luck all 👍🏻

[smurfy2001] 19/12/2023 11:54

Is the Aviva share price still too cheap to ignore?

[spud] 19/12/2023 11:14

Good news : An uplift in the well overdue ISA allowance.

spud

[1robbob] 19/12/2023 10:55

It is always the unexpected that de-rail markets and cause consensus expectations from being fulfilled..in either direction

So where could the shocks/surprises be in 2024

We know there will be an Election and we know that there will be a new Government by the end of the year
...So this will not derail or encourage markets

A new Government with a low or no overall majority, suggesting the possibility of another election in short order, would not be good news

As a recent poster mentioned a new Government resulting from an extra-ordinarily low voting turnout would not be good longer term

The market expects inflation and interest rates to fall throughout the year. Any change in this would not be good

Good news: A change in the Governor of the BoE

Good news: A long overdue 'Big Bang' in the City, finally shredding un-necessary over regulation and uncompetitiveness

Good news: A bid for a major FTSE100 company, finally making HMG face up to the undervaluation, and increasing irrelevence of the UK Equity Market

Gents I am sure you could add more?

[mw16] 19/12/2023 10:44

Got superiority complex!White English me thinks

[whatsup32] 19/12/2023 10:24

A friend bought a new Audi Q7 as present for his Mrs ( 4th child en route) paid £78k ?
Tried to insure it quoted £28k . London resident.

Also presuming a few of you are my age and healthy (67) birthday 15th January.
Try getting travel insurance specially to states , quotes in thousand and won't automatically insure you if you are over 65 .
I got an American Express Platinum gives you automatic cover for States for 90days? Up to age 70 . Ticket has to be paid for with AmEx. Cover seems to be good