Volatility again hit shares in insurance companies today after Aviva reported strong preliminary results for 2003, countering the outlook put forward by Prudential yesterday.
Pru announced its second dividend cut in six months sending Aviva shares down with the rest of the industry.
Today, however, Aviva said its outlook for Europe and the UK markets was strong, with improving margins on both its life and general insurance lines.
Despite reporting a 5% fall in global new business sales, the company was able to report a rise in operating profit and an increase in its final dividend, taking the full-year dividend to 24.5p per share from 23p.
The company adds it is “well prepared” for the new accounting requirements insisting on realistic reporting of assets and liabilities.
”Aviva is fit for the future with a strong capital position,” says chief executive Richard Harvey.
”We welcome the new UK realistic reporting regime and are well prepared for it.”
The value of Aviva’s three main with profits funds at the end of the year reported was £50bn, with an average statutory free asset ratio of 16.2%, and a margin of assets over liabilities in excess of £4bn according to realistic reporting requirements.
The rebound in global stock markets is reflected in the average holdings of the with profits funds, with equities accounting for 38% of assets last year compared to 35% in 2002. Fixed interest dominated, however, accounting for 42% of assets, down from 44% in 2002.
Aviva shares are up 29.5p to 572p.IFAonline
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