Aviva fund management profits increase 48%


Aviva has seen its fund management profits increase 48 per cent to £49m for H1 this year, compared to £33m for the same period in 2015, as the integration of Friends Life bolsters its assets under management.

On the eve of Super Thursday, when the Bank of England announces how it will respond to disappointing data after Brexit, the insurer has also stated it is designed to be “resilient to a low interest rate environment”.

Fund management AUM increased 10 per cent to £319bn compared to £290bn last year.

Multi-strategy has experienced a particularly positive period with AUM more than doubled to £6.2bn compared to £3bn for the same period last year.

The fund management business benefited from the transfer of £1.5bn of Friends Life assets in HY16, following the transfer of £45.1bn last year.

External net flows were £600m.

Aviva’s UK Life platform has seen AUM increase 23 per cent to £10.3bn compared to £8.4bn.

For the entire business, the insurance company has seen profits rise 13 per cent, and it is increasing its dividend 10 per cent, stating it is on track to its target payout ratio of 50 per cent.

Dividends have now increased 32 per cent since 2013.

Chief executive Mark Wilson says: “Our UK businesses delivered encouraging results. We are growing in the UK, we are investing in the UK. We like the UK. And we are also benefitting from Aviva’s diversity, with 42 per cent of our earnings coming from outside of the UK.”

“Aviva’s strong financial position and diversity mean we are well insulated from external events. We have deliberately designed Aviva to be resilient to a low interest rate environment.

Speaking on the outlook ahead Wilson says: “We are committed to maintaining a strong and resilient balance sheet, a sustainable dividend and growing operating earnings.

“While uncertainty in the economic outlook may persist in the short term, we have not observed major disruption to our operating activities and we continue to target mid-single digit growth in operating profit over the medium term.”