Aviva Plc Interim Results Statement

Aviva plc (NYSE:AV):

Strong operating performance	Total operating profit up 5% to £1,337 million (HY10: £1,270 million); up 13% excluding impact of £84 million special distribution benefit in 2010 Operating profits in Europe up 21% to £525 million despite financial and economic difficulties in the eurozone Operating earnings per share increased to 29.1 pence; total earnings per share of 4.1 pence are lower primarily as a result of unrealised Delta Lloyd investment variances Pro forma MCEV NAV, including the impact of the sale of RAC, up 33 pence from FY10 to 575 pence per share at HY11 Group return on equity strong at 12.8% (FY10: 14.8% on a lower equity base) 5% increase in interim dividend to 10 pence
Beating targets	14% life insurance new business internal rate of return (IRR), against a target of 12%* 96% group combined operating ratio (COR), against a target of 97%* £0.8 billion net operational capital generation in H1 towards the £1.5 billion FY11 target; now targeting between £1.5 billion and £1.8 billion in FY11 On track to deliver £400 million cost and efficiency savings by FY12
Leaner and fitter	Significant strategic delivery and strengthening of the balance sheet provide platform for further growth:     – Sale of RAC at 17x earnings for £1 billion will realise significant shareholder value     – Reduced shareholding and deconsolidation of Delta Lloyd raising £0.4 billion and further de-risking our balance sheet     – Pro forma economic capital surplus, including the impact of the sale of the RAC, up 23% at £6.9 billion (FY10: £5.6 billion)
* Excluding Delta Lloyd

Andrew Moss, group chief executive, commented:

“This has been a successful six months. We are beating all our operational targets. Operating profits rose in the UK and have increased by 21% in Europe despite tough economic conditions.

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