Aviva’s UK Life business delivered a 5 per cent increase in operating profit during 2013, from £886m in 2012 to £930m last year, driven by a 16 per cent drop in expenses.
Aviva’s annual results, published this morning, reveal group-wide profits rose 6 per cent year-on-year, from £1.93bn in 2012 to £2.05bn in 2013.
This is partly due to a significant cost-cutting effort during the year which saw the firm reduce expenses by 7 per cent, from £3.23bn in 2012 to £3.01bn last year. In August 2012 the group announced plans to cut costs by £400m across its global operations.
In Aviva’s UK Life arm operating expenses fell from £675m in 2012 to £569m in 2013. Aviva says this came as a result of “delayering management structures, distribution rationalisation and prioritisation of IT and change initiatives”.
Aviva group chief executive Mark Wilson says: “The turnaround at Aviva is intensifying. We have focused the business on ‘cash flow plus growth’ and the benefits are starting to be reflected in our performance.
“Following our exit from a number of low margin, underperforming or non-strategic businesses, Aviva is simpler, more focused and better managed. We have significantly improved our capital surplus, increased our liquidity and have a stronger leadership team.
“Although we have made progress in 2013, I want to guard against complacency. Aviva still has issues to address. Have we made progress? Yes, some. Is it a little faster than anticipated? Probably. Have we unlocked the full potential at Aviva? Not yet.”