Aviva is back in the black after posting a £2.2 billion post-tax profit in 2013.
In spite of stronger than expected headline figures, the group said growth in its fund management business continued to disappoint. Aviva Investors grew its fund management contribution 74%, but at around 3% of group operating profit and with assets under management of £241 billion, chief executive Mark Wilson said this remained 'inadequate'.
'Plans are in place to address these issues over the coming years and Euan Munro brings much needed leadership and impetus to Aviva Investors,' Wilson commented.
The group said the turnaround at Aviva Investors was likely to take time. During 2013 the business saw £5 billion of net outflows.
The business recorded an IFRS profit after tax of £2.2 billion for 2013, up substantially from the £2.9 billion loss it posted the previous year.
The company said the turnaround was largely attributed to a stable profit stream and 2012’s figure being hampered by the write-down of its US arm which it sold towards the end of the year.
Operating profit rose 6% to £2 billion, while Aviva UK’s value of new business increased by 4% to £435 million in 2013, up £15 million on the year, which the group attributed to the RDR and auto-enrolment.
Wilson (pictured), group chief executive of Aviva, commented: 'Business has adapted well to the RDR with strong net inflows in our platform and small and medium-sized firms-focused corporate pensions offering,' he said.
‘Going forward, we expect to capitalise on our market leading position in annuities, benefit from a partial rebound in protection sales in the bancassurance channel and extract greater efficiency from our back book.’
Aviva added that it had saved a total of £360 million at the end of 2013 putting it ahead of its cost savings plan to reach £400 million by the end of 2014.
The market responded positively to the news. At 8:35 Aviva was trading at 501p, representing an 8% rise on the day.