Economy

Aviva's full year profit rises 2%, plans £500m buyback

Aviva's full year profit rises 2%, plans £500m buyback

For fiscal 2018, the Group targets greater than 5% growth in operating EPS subject to the impacts from foreign exchange, weather and other items. "For Aviva, the United Kingdom is a dependable and growing business", Wilson added. However, with the ground work now complete the next job is to prove a slimmed down diversified insurer can deliver long term growth as well as cash today.

Our largest market, the United Kingdom, has gone from strength to strength, growing sales, market share and profit.

The group reported a 2% rise in operating profit to £3 billion in 2017, driven by a strong performance in the UK. The company said this was "attributable to adverse prior year reserve development across auto and property insurance portfolios together with weaker accident year profitability in the auto insurance market, where bodily injury claims inflation rose sharply". Of the GBP600 million to be spent on acquisitions, GBP130 million has already been allocated to its Friends First acquisition in Ireland.

Life Insurance remains by far the largest contributor to group profits, with operating profits of £2.9bn - up 9% on a year ago. "Aviva has broad-based growth, with six of our eight major markets delivering double-digit profit improvement".

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"In the next few years, we will continue to invest heavily to grow revenue and fully digitise our business". However, the underwriting result deteriorated from a profit of £168 million in 2016 to a loss of £64 million in 2017 with the combined operating ratio increasing to 102.2% (2016: 93.0%).

Establishing an artificial intelligence and global data science group, Aviva Quantum, a year ago with 550 data scientists employed has led to significant improvements in insurance quoting and customers' buying process.

As of 09:12 GMT, Aviva's share price had given up 2.25 percent to stand at 496.20p. Substantial cash generation means the group is well capitalised and can afford to splash on more bolt-on acquisitions, reduce debt and make significant returns to shareholders.