Aviva’s (LON:AV.) integration of the savings and pensions group Friends Life appears to be on track in the first three months after the £5.6bn deal closed, the interim results reveal.
Already, it has uncovered an impressive £63mln of a potential £225mln of savings and synergies, although the impact is yet to filter fully down to the bottom line.
Operating profits were just £100mln higher at £1.17bn as the company was hit by adverse currency movements and effects of disposing of unwanted business.
Under the bonnet, things look more encouraging the value of new pensions and savings business was up a quarter and the general insurance business performing well.
The latter’s combined operating ratio, a litmus test of sustainability and profitability, was 93.1% - representing Aviva’s best performance in eight years.
Aviva has also plumped up the cash cushion it has to guard against the impact of a downturn in the financial markets, putting it on sound financial footing. The economic surplus has risen £2.8bn to £10.8bn, giving a coverage ratio of 176%.
Investors, meanwhile, will be rewarded by a 15% boost to the interim dividend, which will grow to 6.75p.
Chief executive Mark Wilson said that after three years of turnaround, the business has now entered the growth phase.
“We have improved the balance sheet, simplified the group and we are now transforming our business. The progress is evident in these results,” he added.