Friends Life purchase boosts Aviva profits by 37%

clock • 1 min read

Aviva UK and Ireland's profits increased by 37% to £1,432 million due to its acquisition of Friends Life during 2015, its full year results for 2015 have shown.

Friends UK contributed £358 million of the £383 million increase in operating profit, the insurer said.

Mark Wilson, group chief executive officer of Aviva, said "The integration of the £6 billion Friends Life acquisition has gone faster and better than expected."

The value of new business in protection increased by 64% and 41% in the pensions and platforms market, Aviva said.

Aviva's UK and Ireland general insurance and health business delivered profits of £430 million (FY14: £499 million).

General insurance premiums increased 1% to £3,967 million (FY14: £3,935 million).

Meanwhile, remittances from UK and Ireland general insurance and health increased 22% to £358 million (FY14: £294 million).

In UK Life, the total value of new business including Friends Life increased 29% to £609 million (FY14: £473 million) despite regulatory challenges.

The insurer also said: "With a Solvency II ratio1 of 180% and a surplus1 of £9.7 billion, our balance sheet is one of the strongest and most resilient in the UK market. Over the last four years, we have tripled our economic capital surplus."

Wilson added: "2015 was about stability and growth at Aviva, against a background of market volatility and uncertainty. Aviva is now a stronger and more focused business. We have completed the fix phase of our transformation."

"The integration of the £6 billion Friends Life acquisition has gone faster and better than expected. We expect to achieve our target of £225 million integration synergies in 2016, one year ahead of schedule.

"After nine months, we have achieved run-rate synergies of £168 million and expect £1.2 billion of capital benefits, £400 million of which we have realised in 2015."

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