Aviva PLC's (LSE:AV.) results have been well received with shares marked up 1.4% with analysts at UBS pointing out that most financial metrics were ahead of expectations.
The Swiss bank said solvency of 202% was 3 percentage points ahead of consensus, cash remittances were 9% ahead of expectations, cost savings are now expected a year early by 2023 while operating profit was 2% ahead of consensus although in line with the UBS prediction.
It said life operating profit appears to be lower than expectations but general insurance profit beat expectations driven by higher investment returns in the UK and Canada.
There were also favourable weather impacts, UBS said, without which the core operating ratio would have missed expectations, as against a 0.9 percentage points beat.
UBS kept a 'buy' rating on Aviva but expected a neutral reaction with the low quality of earnings in general insurance, offset by the high solvency ratio of 202%.
Richard Hunter, head of markets at interactive investor, commented: “Aviva has delivered a strong set of numbers, with confidence underlined by an upbeat outlook where the positive momentum is expected to continue.”
“There are a number of areas in which Aviva continues to prosper,” he said.
“There is an element of inter-dependency in the products it offers, providing scope for cross-selling opportunities as well as the bulk annuities business where Aviva Investors can take on the investment mantle.”
“In addition, the group has reduced its geographical footprint to concentrate on the UK, Ireland and Canada where it has dominant positions in each territory,” he added.
He concluded: “Aviva may be in the driving seat for those factors within its control, but wider questions have weighed heavily on the sector as a whole and this could take some time to reverse.”