"Aviva’s financial position has been transformed and a distinctly stronger balance sheet and excess capital give Aviva more options."
General insurance net written premiums rose by 15% to £8,2bn and life insurance new business was up by 13% to £1.4bn.
The group’s Solvency II regulatory capital position improved to 189%, and Aviva says it is now "actively planning to return additional capital to shareholders and reduce hybrid debt in 2017".
Mark Wilson, Group Chief Executive Officer, said: "Aviva’s results are simple and clear cut: more operating profit, more capital, more cash, more dividend. And there is more to come.
"Aviva’s financial position has been transformed and a distinctly stronger balance sheet and excess capital give Aviva more options. We are now actively planning a capital return to our shareholders and debt reduction in 2017 and will invest further to grow our businesses.
"The numbers speak for themselves. Fund management delivered a breakout year with strong positive net flows and operating profit up 30%. General insurance is growing, with operating profit up 17%1, and in UK Digital we have doubled online registrations to five million. We are becoming a digital disruptor for the benefit of our customers.
"In 2016 we made strong progress on our commitments of cash flow and growth. Reflecting these results, we are increasing the total dividend per share by 12% to 23.3p."
Nicholas Hyett, Equity Analyst at Hargreaves Lansdown, commented: “As far as a pension company’s results can ever be said to be “simple and clear cut” Aviva has achieved it. There are no sweeping strategic changes and, short of the impact of the Ogden rate on the general insurance business, no unpleasant ‘exceptionals’.
"All divisions delivered steady growth, Solvency improved more than expected and the dividend rose ahead of expectations. The improved capital strength is particularly notable, since it raises the possibility of additional returns to shareholders this year – either through special dividends or share buybacks.
"Overall, these results suggest Mark Wilson has built up a solid set of foundations at Aviva. Steady profit growth and plenty of capital generation mean the group can start funnelling cash back to investors or fund new expansion as management sees fit.”
