AIVAF - Earnings call transcript Q3 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to Aviva plc’s Q3 2020 Investor Update [Operator Instructions]. I will now hand over to your speakers today, company CEO Amanda Blanc, and company CFO, Jason Windsor. Please go ahead.

Amanda Blanc

Thank you, operator and good morning, everyone. And thank you for joining for our Q3 trading update. is safe everyone these well hope times. difficult really being and staying in I Jason, who our through with here I’m CFO, trading shortly. the will performance QX you take through to But hand you on I'd Jason the areas. update nine key to like before to months over take I two update, trading you

on progress August. making options priorities the the First, are I and strategic we set in out

we've would, I will take decisions promised the dividends. we I made as our Second, through around you

the portfolio, outlined I in focus financial strategic So performance three strength. transform priorities, August, and

priority is to and can These positions, we first win. Ireland in to The where on focus leading rights Canada. our most the generate the attractive strongest are and businesses market marketing portfolio our returns core strategically and advantaged have the UK, have

international owners I continental that than of these these our already good And markets manage would progress shareholder announced better Asia, and clear have Aviva. I August that long pleased billion was we be for made and for may Europe disposals. to have said term £X report ultimately I'm we businesses Since there value. in For

All of accretive to capital. be which will

this us We I are exploring to purpose are will with and to options in available touch continuing clear the a detail work a more upon moment. in elsewhere.

is second Our priority to transform performance.

started can we long growth our where core in margin this As during in that robust delivering key growth QX, attractive to segments term on have make progress and report businesses, we are I'm pleased prospects. we to achieve the have especially

is in and investors the in net life delivered a Aviva There of of bulk party billion net year strong has that £X and uplift been date, of retirements, £X fund which funds last of than double We billion billion, annuities insurance £XX savings billion growth flows. sales more £X.X year. have third UK achieving in including XX% to purchase seen

growth achieved commercial premium on in the lines’ digit building is written X%, double we Our net XXXX. up

track very success the insurer the our time British week, This at rely recognized claiming lines the to a markets last full clean that Furthermore, been by I general, to achieve Insurance for any we XXXX. won have million not full of for is is the deliver Awards year. £XXX commercial £XXX we in these exceed is meaningful Ireland As truly winning our and has from during all abundantly the sweep company to first strong to challenging recognized change million personal way very needs savings of that to What can on of costs, and and any XXXX disposals proud performance. Canada, deliver many year year we that confirm three will cost On core order been high And our savings and in for together. standards UK, are the our savings. service clear will offering a me, targets transform however, year this have we customers. awards product Aviva we're on our of

are a fronts. We taking of actions already number across

and and clear on are continue underway. we are we is layers they automating platforms, the colleagues number of in that to and to capabilities. is that of journeys, property costs the effectively. bureaucracy, claims digitizing you necessary more customer the them execute changes change tell example, and For the projects the need rationalizing our sales our need Thus, legacy will removing underwriting, simplifying, efficiently what of identifying in and required accelerating reduction and our and investing My

as there take to great the progress. is time However, we will performance of deal focused on a and substantive and despite do. initial I will we're some you Aviva But success, delivery transforming make update

is financial priority strength. third Our

in balance Aviva's that robust demonstrate results health. QX sheet Our is

which half year, leverage to will Solvency reducing X be I percentage £X.X Solvency strengthened billion, debt disposal commitment point further billion, XXX%, of liquidity ratio ratio. II £XX.X the II Aviva's by my capital surplus from am up of proceeds. of reiterating central

cash use disposal £X.X two continue to be over the debt. portfolio, opportunities the from to to billion intending reduce this. years are as proceeds work We there more Vita Singapore of on And will we aggregate of Italy the other and to next do Aviva

Let portfolio touch our upon detail. more actions me now in

term consistent complete our are to for We the Singapore In Italy of have to XX% with this the to deal share QX, ahead pleased I'm is of progress billion. months our our we shareholder managing Visa holding, in of business XXXX. announced confirm By Aviva for consortium approach have week, two approximately in original portfolio September, benefit week, retaining on expectations. next market a the hope we this track long that made expected the and value. with of potential majority of we announced billion attractive future portfolio into efforts and completion million sale £X.X by from Earlier our for a good with August led our to of that refocus £X sold £XXX Singlife we to a total disposals.

our we the [interest], our We expect the of end by have complete the and Kong also of Indonesian Hong year. this disposal business of to completed sale

We are being decisive.

you are see them delivery. on as focused one-by-one we We are And can off. ticking

very you and to saying stakeholders, to our conclusion. take paper. of Poland, us you businesses we that saying options worth the that is I joint it multiple France, I will think shouldn't confirm remainder in the But for everything ventures. be that, read I can to Italian it and These are complex exploring are Now reach time our direct with want in our businesses believe

thing people. in doing our disciplined for our We will shareholders and right the be

we manage update to make value will long as term we progress. and for shareholder businesses these you continue will We

our our group future commitment term to said to August, would debt and policy light longer the in ongoing the dividends. I reduction. now we review our Turning priorities, of shape of dividend in strategic

announcing cash remittances our an are expect this we XXXX. businesses UK, our be dividend new to £X.XX sustainable dividend to board's and generation, and announcing the capital January the seven tenths today and per growth policy, which we total has core paid at share our be Aligned which subject XXXX to XXXX expectation of to is which will low the for believe Ireland ordinary of resilient deliver final on per determination mid single will from current of by are policy, we the per grow the Covered £X.XX XXXX our to will time, dividend and dividend. the course Canada, dividend the share, dividends been We the share, per digits. and ordinary new in a share. XXst final dividend that interim

a the market are volatility and with dividends. through understand now moment is absolutely dividend the decision prudent our of with align financial taken that be significant on and been appropriate we of to challenging uncertainty. COVID year the importance This to not dividends have to new will Brexit and believe conserve We positioned distributing focusing we ensure strategy markets. capital final period a to our core well we our of our XXXX but We strength that shareholders, enhance has the our the

to tested of portfolio. lower businesses An our transformed component Future and stress capital our resilient. of the clearly and sustainable performance the out by policy levels be the dividend of and framework. debt forward by will new to our set will in dividend market focusing of new aligning be the market important go have We leading growth our from the our believe benefits driven dividend is that core capacity

is been have financial We remains of this a that priority, key clear capital heart strength our and the at framework.

range Our at XXX% to XXX%. working Solvency II remain will cover ratio

and remain reducing will this process our cover above go that Although, debt. we our intended the through as the we reshaping group range of

sub We when exceeding above debt ratio we return capital the target. our XX%. a result reached Solvency £X.X with billion our have committed reduction to leverage XXX%. Once This reducing group, to us we we rating II debt consistent II is will reshape is expect Solvency maintaining ratio, metrics. this are the in likely our approach leverage credit shareholders cover And XX below to strong excess as to ratio

sustainable absolutely value. terms generating think capital, of shareholder In how are deployment we we to of strong about committed and excess

to look return We core invest our we opportunities debt, see to attractive to capital continue shareholders businesses to where so. will reduce and in do

I those core amount businesses of And our deployed We growth. will have support will within we to a that capital you substantial balance already remind carefully priorities.

hand provide some over will who's performance, going color the let more to me Jason take Now to and financial QX you dividends. the on through

Jason Windsor

good everybody. Thanks, Amanda, and morning,

As Amanda just our commented, we're making good progress delivering priorities.

sustainably in demonstrate resilient and and to businesses in strong results our the have markets these ability We in Ireland QX we're Canada, grow and that. just UK, our confident

of [line], Let's BPA In first volumes whole first. with Spencer XX% million. the months an talk increase nine UK X.X we months second first were of billion, £X grew the than XX% for to the of core relative £XXX This our higher about Marks and year, of and the volumes the XXXX markets in deal nine includes and for Ireland times PVNBP XXXX.

an is like was disrupted for retirement, demand that franchise role and is capital communities a brands, highlight for all measures. risk Health corporate equity primarily a sales, period by year. strong in during Aviva, billion, continues in disciplined disruption. best saving by relationships annuities we to and the While important the testament finance as price in to management to equity their on net increases growth our by pandemic. increase IRR low I the individual protection trading yield down from release confinement year in supporting personal group important health and and team clear which an increase flows COVID-XX capabilities and grew to protection award the But In impacted usage. play lender impact and and seventh prior response release would £X equity while protection driven hurdles with and for row, environment for X% a XX% the Individual Trading competitive the remains in individual release won annuities. was saw our XX%

platform, workplace strong billion. of XX% Net flows and Our platform on are up to assets now flows platform billion. its positive also retail up to £X.X we have momentum billion the £XX £X.X with X% continued

to made nine the internal months with gains excluding £X third solid flows XX% £X.X ranking net Our Aviva flows heritage. advisor perform billion of platforms of net third well, billion, of party of a net with flows investors continued year. and in the share first

prior billion billion liquidity £X.X flows generated external the compared period. our than nine less months to £X in the of addition, net first range In over

general driven saw levels to reduced on rate insurance, from to volumes UK liability COVID reduction with of increases together over prioritize written targeted premiums which X% is as £X.X margins increases, primarily Commercial the and above X% saw XX% lines with strongly billion. to growth. at continued activity in This and Canada flat Personal lines were rate we disruption. and inflation continue property perform respectively. in premiums by growth and Moving net

core our for Moving to trends businesses. the next the and looking at slide quarterly

it's compared ongoing course an reflecting macro reinsurance release annuities, a timing and mismatch Of asset has uncertainty. the equity that QX volumes QX QX, sentiment cautious COVID flows were from lower for individual show, to up BPA as and led mix to new on due business and a year on deals. QX particularly remains this QX been discreet In margin unusual temporarily resilient protection. savings to a trend and retirement, muted but for those XX% were target with and

a You of QX might insurance in prior margins the premiums and GI less the as discrete expect half in saw weather. lower end Margins the XXXX the and to we by General remember partly strong did year. quarter. mainly underlying the similar a with in was in This quarter performance in in you Canada, UK seasonality. offset XXXX, benign to like QX result a had mismatch were we of good first our compared of by

that the also quarter. would net the QX £XXX has SBA frequency benefits to insurance and change general note haven't our back we million estimate Our claims estimate of of half the compared year. mainly for COVID-XX reduced reflects third million approximately BI that had in case. at impact This claims net test £XXX to the further on to the I

Europe will we these announcements Amanda, and where Asia our long international withdraw the to appropriate, continued Aviva seen managed participate capital in as of by mentioned businesses and France result part markets our sales Vita XX% Europe our reduce business being value. and managed for in decreased Continental in for This overall shareholder means by term as COVID-XX both selectively are and Continental Italy. of strategy. Likely will and of Asia that with for Singapore volume in our actions with disruption profits Italy a value business we and in as As recent

somewhat by As quarter you the general QX life months net in from seasonality. the trading is in increasing in insurance, XXXX. the there reduction In a volume has resilient in first the France The second in of been can which is the see chart, higher recovered factor premiums premiums XXXX, below but in year. was QX of marked of nine X% with remains written

is Now strength, financial to priorities. obviously moving on one our which of

The ratio interim quarter QX Our is range. of solvency point by generation, XXXX. X operating £X.XX our dividend the reflects well in XXX%, capital the working percentage our increase payment to target in relation offset above

clear have on that application a the £XXX million Singapore X ratio, Vita. had the to group Canadian a debt and impact of the which better enhancements be France reflect life II X May approximately at also of together expected interest rates in the does our to of correct Solvency it and X with refinance to September on and announced impact point points from issued worth an October rule our OCG. benefit Aviva solvency X Canadian group position negative end the the model dollar to We not notes, highlighting estimated Tier disposals this XXXX. nor reflect at It's matures in which And Tier model, reflect the does

investment Our perform to less and continued below broader shareholder defaults well no grade. has experience. than £XX market bonds of favorably bond with portfolio very million the This to compares corporate downgraded

positioned following with previous Our commercial was defensively, LTV and lending. portfolio on solid fairly new collateral mortgage low restructurings

stable mortgages and the resilient Performance X% at the As to remained to are commercial the half changed broadly but the portfolio very while environment. it significantly LTV continue the given closely monitor year. half year. by of of we such, positions since The remained in have in arrears only has not has date X% to metrics uncertain difficult QX compared loans

Moving of very at end October. billion onto centre which liquidity, strong remained the of £X.X

at least centre. maintain billion We liquidity will £X of at

what liquidity liquidity this expect expect XXXX plan that, Investor is core last the with forms and I of cash the billion least generation line So dividends debt restructure group the previously. in to in units, normal ahead payments, we £X.X this that part XXXX. from be that to Day. do want should dividend recognize it of with means group times, £X at as to said in It's to important to as elevated likely range you What slide of stay to billion per group, the same expected we To explain XXXX do we our reduce at our essentially business and the is year’s out share. in from £X.XX why set using we've targets

core from be remember excess interest our better see flow in in that additional reductions £X.X our this can £X.XX expected reduction dividend million expenses, performance year. count. including region growth options drive £XXX the debt allows we is reduce a There You levers headroom. the And for per after have for share for This ’XX and costs cash the please billion we to investment core cash up costs in allow possible headroom, lower to incentive and businesses, the business. in from £X of with Once sustainable comfortable are of and of the businesses is to billion flow. ’XX

three set we expect out slide, you per on to Crucial Looking single grow slide. to at subsidiaries forward, to solvency of the reinsurance this low I’ll our remittances our position we subsidiaries. is detail core and give of dividend remitting On mid the QX core share next healthy ratios some mixer. our those solvency digits. the cash

spreads further solvency dividend despite of on to outlook subs. and risk you of shown volatility. appetite providing for I've rates the also in This are As and sensitivities COVID-XX key all effects policy. all see, cash capital strong, confidence the they’re the shows these positions resilience new can each the the markets above

wider in we wanted end while XXXX. toward backdrop some to the growth these macro markets we've flows premiums of of With in In in we've COVID-XX move highlight the strength. financial context the as trends. the I and our solid uncertainty, delivered seen of core points strong disruption are maintaining our

ahead second increase billion, than group not BI guidance first cash uncertain we the previous OCG growth QX the performance assumption its broadly of any be the comparisons. first absorbing modeling be and management having be with to to and due but will expect lower Life we expected in with on France life consistent is £X.X change. expect across broadly second half strong longevity, in to the the year of XXXX. claims. significant is are The longevity QX after of in expecting and Savings own, to with UK to other half On be retirement a OCG, rates strong We were albeit the half lockdowns impact actions trends owing mainly the and half the change moderate line to

While excess good cash will be as XXXX below close half remittances XXXX hand XXXX half mentioned of year. of now the back this half is in at second but progress to to year presentation. will Thank the second meeting the in you. which XXXX, in I’ll Amanda I be the

Amanda Blanc

Thanks, Jason.

the points. So to me finish, key let summarize

Firstly, we've a group, the and made to a business now simplifying in selling Italy. good Singapore major start

have a grow core dividend we markets to we to Canada. which of on single resilient which digits by Secondly, the intend new and policy, our and Ireland sustainable, UK, low mid based is

from we solid grow transform business. we and can performance foundations Thirdly, our which have

market We and have can have in market we leading positions areas identified that core our profitable grow.

great demonstrates execution we underway XXXX change in that. let value deal There's shareholders. unlock do on performance focused our at for to meaningful as are reassure to that Aviva, me robust is we seek and a delivery but just Our you and

will we open you to So operator the And me lines now listening. for that let for Q&A. and for thank the back hand

Operator

Stanley. comes question Hocking Jon first from You'll Instructions] Morgan from [Operator

Jon Hocking

to with the capital return, the debt target. I’ve three please, leveraging got starting questions

reached that XXXX? XXXX. Is to XXXX. big once capital about costs end potentially targets during You returning got a the leveraging debt couple of in Actually you’ve the talked bond of

during is that’s be it in possible the XXXX, it ‘XX, to first flow likely capital So to is restarting question.

Second question to debt-to-leveraging the interpretation is to threshold that will in the of else come so back XXX% solvency minus the shareholders. the subject terms proceeds, here proceeds everything

So is little portfolio from then dividend might Slide that growth, there you finally benefit is question. bit there talking implicit that amount second when detail, more an about value that's overlay, message of X, were And dividend management you material on just the the a here a comment actions. a growth know

Just as on dividends businesses. the a core little all confused being bit set three that about

I -- in any there step is up see am management that you interpreting very is there So through that ordinary Thanks can correctly the value? chance a dividend much. the

Amanda Blanc

So that firstly, and line time today. I we're to we've we said that the what us. is committed and the all terms think clearly, we timeline debt leveraging mean, also will that the on to for within I to the the in portfolio have key you debt of any once priority think capital solvency that. we clear manage returns which to and going not options are XXX excess the know reduction, being a I do capital how be we exploring we’re done intend the we for value XXX is operate to and our that return But ratio

there we of be getting quite have that think it's do in terms question, his Jason to to quite, going is also have XXXX that once I leverage And us So I think of think needs goes will outlined around delivered. quite, XX%. I that heart ratio for proceeds, we the specifics our on your that. timeline, second over speech, and And debt be difficult which as do below to the to are the But XXXX. opportunities in to

know reduction. set the mean, priorities. broken So is It like we've feels I a priority debt I record.

return we've will do first. said So investing We’ve excess business. but capital that will what we been the also to is about in the clear shareholders be

significant I got investments business. think that we the we've already within

You much talked M&A. Clearly, about at have we plate. point this our time, on

Jason, never on dividend we say the you we question here. priorities have never out the want third on We growth? did that. as But to up will pick set

Jason Windsor

remittances I Jon, business those core the think businesses. what from is of have and anchor done, the we dividend the

remittances from the there baked in value for nothing So value manage is for market. or

or group's to proceeds would remittances capital investment or additive any be So withdraw financial strength. the

count, for in could So due which course be of that could reduce flow of the cash headroom debt share. use we possibly to additive terms in share both reduce to or

Operator

Shuck And next your Citigroup. James from comes question from

James Shuck

terms So II the Solvency of me, on few the debt based a things itself gearing from firstly, basis. in

up you ratio. owning will anything above what funds actually leverage So end impact have or that selling on an forward

know to helpful. update to situation an I’m on So owning actually and just would to the at the in you’re funds things And interested ticket sell be above level. able golden confident or your very if give -- I'm confidence France that be able

mix. in of investment Secondly, terms the

flow requirements mix the more solvency level the range, there investment by on your is So reduce to that actually target it It's your are about and it's solvency or around what that capital, deploy tricky to debt. risk level that investment increasing cash all easier within risk. depends the profile

So for deploy to you. please. you how solvency investment understanding capital that get requirements Thank on just through might want increased side an

Amanda Blanc

second your first impact. having up pick II Jason funds let and I’ll around question Solvency the question. On an So your

Of course, that's case. the

I that which which we deals value has we you all handled think approach Vita our continue. have that And disciplined Aviva disciplined both accretive. approach have been will been first think the been that and are we I has think something I for seen, that to and managing in Singapore way conscious Italy, two have very in the what

rest I the Italian the exploring our far are ventures, and for France the is options. the think joint at for stage second pick as France, Jason, for you to of up as the I Poland, as said, point? did businesses want concerned, we of

Jason Windsor

on it’s seen very we've news in on actually years On what there's much line no to this, behaving golden with many, for ticket, That’s mean there's many I nothing say -- that. new now.

news no So that. on new there’s

to don't capital of balance we deployment, the sheet. have In re-risk plans big terms

that’s interest and rewarded. imagine. just and you'd equities. integral level risk property XXXX think taken not that that we cool the we bond don't But as We've of reasonable is rate the there and near out exposures, changing We've balance we’re I sheet. insurance exposures reduced as to at But so positioned any don’t growth in we It’s to we’ve exposure wherever deliberately the got set think term. margin the we exposure no that within aggressively and certainly company. see of go can, into

Operator

go from Your Steel Bank. Please Deutsche next question comes ahead. from Oliver

Oliver Steel

of mean, is question, before I timing. until guess, to really the rest coming wait cash some about be your next of Singapore sell to covering however the you're I got. which GBP the and Aviva Italy, planning maybe flow X Vita them by to two excess and Poland as and return if I billion you're new next to cash themselves, down that. the of long going for see why all mean, look Out excess it's cost. pay U.K. use of really excess the First target France, got your Canadian hard years, means I you from can just in And going is operations then the the I you've dividend maturity that actually XXXX immediate and you understand already over debt forward, your until implicitly, of to you've above but cash.

explain that. any don't think other I cash being rather slow can asking any you returning actually I So is more so quickly? lost questions, in there you're if are perhaps it why

Jason Windsor

we one with four mean, months, managed expect week. I in to first of to In role complete been next we've terms two timing, phase. divestments, announce not has Amanda complete the

So it days. is early

progress that so pleased with we've far. made are We the

one, the very in XXXX drawn big on in in year net to coming step that’s redemptions we've QX, pre-financed in a up one. as one terms debt that QX, As two sort but return. we've that we've specifics want the We've got capital development be into We script, mentioned is two don't the million of Canadian in today during the already got on got reduction or so in QX, redemptions that's of I company. go more we of side, £XXX will the

that debt, And options on progress As all to redemptions XXXX. depending but really Amanda to mentioned, We'll got reduce think big priority. is we'll look the in how we've then you make give for to do you and assumptions. your so clear own for through. capital But that what and cash we is leverage very for wanted today take framework a can we

Oliver Steel

things will that just of how quickly. I I If you cash or can return normal actually are mean, saying be above until progress? [open] XXXX, it there dividend no depends specifically saying sort are follow-up the you on

Amanda Blanc

the will I range, that other and said for we're as working are capital we of Italy, at as keep think our above the saying And on we France, stages markets, early et will that the particular exploring that well we what is cetera. we reduction. your in the focus do more options Poland, we debt

excess So that we're need will clearly, do. just to to completed but And hold actual just have it the we we not the not our capital. being work But feel, to the time you lines we're when on today, giving specific about is framework. we we plan return that

Operator

next question from America. comes Bank of from Stewart Your Blair

Blair Stewart

question, more. a wanted I I'll couple But a I different that. same way. it leave and won't ask at the but in try to ask

businesses expectation particularly the you heavy line assume are just a Should there light you're in As or sold, SCR terms being that the sell with get and that better any modeling SCR on are that of perspective? on that handle the from II or we those a try Just in an reduces happens your to footprint what's there. to of Solvency the basis? businesses, what

to question single mid is you dividend. said digit growth Second the on low

the the you'll drawn on bit had of X% think if X%. a bit increase on I'm the one your lots you. and a moving dropped And if between during be clearly, same wondering and that. year, parts. Thank something wonder specific. the more competitors a just to said of UK translated that finally, But in I bearing bulks Life solvency

Amanda Blanc

I'll question. first second Jason, question and pick and third pick up the up the

on growth. we're So the drawn be No, going mid to low an digits. as not single number, exact mid far low it's as single digit to to

seen I already and and UK, just say you if performance to there. at to from that because think will about do QX strong really there ability the confident that what able performance we we a be is Ireland we've Canada look is robust that, the businesses, are that the

continue that. will we obviously to So do

BPA. You we is commercial saw growth in savings, loans, it market the hardening. The in see workplace growth in

to we that. upon really the opportunities So see capitalize

also We see improve organization. efficiency the potential of the to the

also so focusing already reduce of more go reduction in to opportunity real the simplifying, that. to there gives but us the progress obviously Jason we've again of will outlined then more do the cost the portfolio. we interest debt there. benefit opportunity So made And see that that terms

to have value you from -- managed note market. we for any to dividends have we So that the assumed not have

sense want to So Jason, be specific we're not a confident to… asking. in Blair, drawn but for but thanks that you do on number,

Jason Windsor

the and of very business intensity is So SCR very, the different.

mean I'll the of capital own use Vita in billion, just capital a X.X can our three the two We sell benefit, approximately I of and and quarters Aviva so funds benefit. for £XXX Singapore of helpful and funds. times million over points for X got Aviva Singapore X So points got example, you Vita. We in see examples, sell

the where the of So the particularly at higher. intensity the SCR Continental group is businesses much difference you level comes the intensity, can see SCR from that European much,

mean dividends. I Life, that's In solvency little payment of partly has bit, formed terms UK of a

mentioned might is, little group imagine, the a or I There's quickly bit take bit of in the from that little will you We that QX that million residual of from UK as year. impact got in capital the have impacted and give this macro point uncertainty bulks, relatively temporary cash £XXX unwind of Life. has by

than are the So little the of at start lower market bit a levels year.

Operator

Andrew from from next Autonomous. Your comes question Crean

Andrew Crean

give we're a will give Just I'm and every how France if you Secondly, credit I the for first how us return to you could could including Poland your breadth and when JVs, some decide that and the specials? but as the remind to Italy done buybacks of funds about if for whether questions, on have or business. assess you to the or lost three from our What for difficult I'm as and us would talk be sure XX% you to disposal be me do capital, from can helpful at, remainder idea us question outside own And proceeds, surplus duck and the when you have it may. When pension capacity our looking, looking leverage? you shrink you you indication. very preference diversification you if in it's its much fund? the thirdly, first define Is goodwill this the some then

impact If give some of percentage us you Thanks. sort really be could it’d of that, useful?

Amanda Blanc

can I up Andrew, Jason the two. up first and pick will question the pick second

thing shareholders the to I debt terms not I we not think reissue will balance In the did will specials, some sit we or once to or capital obviously, reduction. in will whether capital. that we to about But we're on that it's And how Jason, right think want how you or excess the the investments is the return decided one then pick committing return buybacks the place with we up… will our priority we growth. feel boots the future in of

Jason Windsor

And goodwill, then the The to funds to just capital wouldn't on that the diversification of you and in basis, be a surpluses terms mean I clear. proceeds proceeds, any by the affected big leverage it be mean or be diversification, benefits. they say depends. cash the I ratios include so with not any does

I've is that reduction because side on think the about the SCR in life. XX% non-life diversification of the the of that I said in past

relative SCR I used higher life think have the of of reduction XX, businesses, the be life could of interest terms to -- sort is around the in it rates because total a moved slightly be UK international businesses to bit. in

benefit XX% is undiversified and of between life So a from XX% companies. international it’s SCR from somewhere diversification

Operator

from comes Your question Hanif next Suisse. Credit from Farooq

Farooq Hanif

around questions of in couple the a transformation UK. Just

of me seems talk on accelerate it particular look plans Thank of Can are that on and capital if you. to UK back at that? also utilization what SME transformation attractive and your there would to in in life? GI. would the commercial, in that conversely, are sort towards UK then of on thoughts what so grow commitment any? GI you you a your that revisit more to side and areas you sort What bit put are disposal book So to are legacy little about And

Amanda Blanc

transformation the point. on So

So commercial the We strong some as have do a very very one line we we start transform think opportunities number and already position also look, performance number from of that I UK digitization. the across think proof a around strong see insurer are there I business. to points

already £XXX remind the of UK, plan, over you of and worth in core in So we have Canada. million to investments businesses the the just Ireland

know, to the digitized. customer and customers be is that our opportunity set journeys the of priority, see are and at forward. see now next year that move we to grow aside the this there to level our for see growth strong to continue able in to XX% products. the you of seen we as their opportunity already investments as So creating Over to all the to good these opportunity take businesses. We've do lines far commercial We look we so already

So their on people looking their increase the this and app looking a we've home motor in year we've big are terms and pension £XX of number workday the policy. then of at MyAviva is as MyAviva their seen million, or log-ins at about seen policies

experience. continue So customer to we to see enhance that the opportunity

I it's So part pensions we We to see what growth capital annuity there important purchase think will the that of of business, areas strong But allocate we also are other do. business. we the positioned the already that we and therefore, will and grow have to in is are is invest brand. opportunity market our in the that to growing that. And area in continue we strongly an

number but not is have to the UK be We over which of great brand a in brand we've position years. number in one last a invested that insurance,

efficiency. next the we targeting then we year. the to So plan deliver the brand at And relaunch businesses quartile to are

do I around feel opportunities platforms, whether where capital the or have But there. grow. business that we’ll a how of we the about allocate to confident technology and very think we'll So people, it's measures we it, and there's capital our range teams

Your second and business cash in at the the strategy at, changed. I hasn't and moment. half life think flow to question we the role UK believe year around the revisiting of not an the important looking UK that that, We has at business terms that play in something that legacy business are is that we discussed that

Farooq Hanif

list? basically transformation. And just sort is quickly saying on significant M&A mean, the on what you're not is major of that I

Amanda Blanc

one in what plenty we we're that, we player areas the And at that a moment. to on focus is of position, never number look, and already focus got we believe GI we've strong are But we're in pretty both So in U.K., saying say the that as other on the never. Life. in

Operator

comes Your Greig KBW. Patterson next question from

Greig Patterson

have was questions. in would margin what of first and you've through half reinsurance? that give quarter asked the conditions. by of boosted I your wonder margin this very could temporarily third if an be, the I normalized reason asset had favorable us the you And idea the is, you if is three previously bulk One allocation I said

don’t year. know for what I this So normalized margins

central impact, reduction and would that remittance Second I’d just to some or reduction in a that position the I in if debt that is dividend and say Am base current your program? table the Canada. competitive question of cutting on explain thing increase to landscape check, you the produced table venture could that your is, pre-cost component is. is debt cost competitive on what the thoughts correct major third you might or wonder you competitor Canada. the the in impact how And I

Jason Windsor

pretty the around But and QX the I guide. as reinsurance [Multiple the decent Speakers] margin a is assets strike said, express of nothing invested do that. to deals. EB it Clearly first So as one we normalize like get X% was we

Amanda Blanc

very question RSA number of development weeks. the second about over interesting your last tax, On and obviously,

have services position market. of I already is see position significant market. already brand have in financial partnership we in RBC, top that there with is lines. think commercial three our growth, the in in of headroom particularly Canada, that that strongest course, we We And the for a which terms in

question, really On yes. continue there. see third we opportunities to a to forward, grow relatively I think it’s your straight exciting So

Jason Windsor

Well, we XXXX. but anchored give on it's tried to sense a just really

we We through it. we have what into that where really in that do factored it’s come factored not we significant will It's reductions cost and reduction. significant and are as debt

Greig Patterson

The reason new in capital cetera, the is cetera. for I question et £XXX remittances, gross includes rate asked which of your the targets million include obviously amount the the et

headroom which is adjusted but expectations, the fair the Is higher it’s So thought what that's reading than there. implies that have for was is that [£X.X actually expectations not a process? billion] deduction for I

Jason Windsor

But haven't tax Well, think said, if forward which down through costs other a interest I bump just were I cost as X.X particularly into number kind a the place, we that we you expectations, bit things. just is cost is I annualize baked to and all reduction pressure off that, to ‘XX on figure. group on That we the and -- the around does in costs. of of in saves just one is project mentioned, average used the number. And due why for low that looking and see then reasons good ‘XX coming the and two

Operator

Your final Gordon. from from Zhu Panmure question comes Ming

Ming Zhu

please. three Just questions,

more forward, market. nine you ‘XX for is more And full focused question all any the recent and is and on due the running just the there's comment your What of BI, would central First, going BI terms you terms need What business on BI in to on third changed final I new of based liquidity a cost you've you the is you. look lockdown. month mentioned Thank at your central you solvency business the you second not the a question the holding recent out back cash paying very And center? cost sold is my in the think your position and year on of have wording? And all strong. dividend? -- your policies, minimum paying

Amanda Blanc

Jason, up I’ll and you pick three pick two. up and can one

paying back per ‘XX, are of that full £X.XX declared we share given terms we're per the keen unexpected to So of share. dividend dividend, £X.XX XXXX the we've today interim year think total say business I in in dividends of XXXX that that

key changed of question look uncertainty. strength priorities. Brexit to were wording. earlier a financial we’re have and with one There well the year it's the we financial that regulators business position through capital that do just this our else we year. to I from third in and and the policy our today took the On just question, a So conserve really discussion to challenging as prudent strength been your two interruption. to environment, think COVID the around we to we And future were our parts reinforcing enhance what make positioned decision want and recognize sure ahead, We everything is

policy I think a require changing to policy wordings the go the our whole wordings clear, largely but us period. will were on very renewal through

of you beginning all will we And that sure March, the making So of are as end clear be will many of know of renew either policy as policies. January the policies, first or renew very we larger the wordings April.

the you outlined. As our interruption through coming interruption changed. you're that the Jason, not is far as think frequency of numbers, What [Multiple essence the is seeing in Speakers]… I estimates Jason on see have business which benefit what actually concerned, business are the

Jason Windsor

two of reporting I'll one but a just group go the we're which dividend comfortable to minimum be see means just payments over again. the We pretty before where range. a that before and in figure tends to And the we date, a for aim that's treasury half have and announced sort to you'll for like in dividends, liquidity. billion

and As over revisit of forward smaller, that you sort but and should we couple that's next years. certainly we'll the level further the expect group's bit a look

Operator

have And line of you HSBC. from Haywood more from the Steven one question

Steven Haywood

wanted of I a ask to please. quick questions, couple just

actual the French On ratio your impact the downgrade And local you solvency to you or please? credit provide secondly, on supply And the was the not assumptions future. then assumptions property, rule, assumptions? update your there's performance U.K. in could me actual have -- you solvency defaults solvency French the improved tell and on what the for the ratio, in an can on experience about potential versus these be whether

Jason Windsor

I first, second may. if the take I'll

stayed. I of that of something X% like X% XX% So on BBBs in the downgrade As about And QX, months were of and said, kept that it we've seen in we downgrade nine as year. the assumption, the first was that

see probably will clearly now. reasonably our need actually overlays, we’ll and up decisions the catch think but take agencies I started So I won’t out events have we prudent think to end We with it's that to by bring us carefully. that year

the French side, today the disclosed there. group, X on impact is insolvency we've points the what On

What capitalized capital disclosure in we the in can does I expect provided issue haven't a France sub needs remain well specific don't and consequence French this. as France. the to was it French of We a any and the subsidiary say is

Amanda Blanc

you. Thank

think the of end that's I questions. the

for physically morning and So you appreciate all listening. all your thank some really of it thank hopefully see at And want I actually much. this you and get with but to to I questions you, that, will just for point, Jason, we very

Operator

Thank you. for joining. That does Thank you conclude today's presentation. all

now may disconnect. You

Aviva (AV) 26 Nov 202020 Q3 Earnings call transcript