Aviva to take all year to find new CEO

Aviva, the general insurer which recently lost its Chief Executive Officer (CEO) after a shareholder revolt over pay, says it has made a solid start to 2012.

Operating profit for the first quarter of the year is marginally down on the corresponding period of last year, but stripping out the effects of the sale of car rescue service RAC and the de-consolidation of Delta Lloyd - which is no longer a subsidiary since the group sold down its stake - sees operating profit show a slight increase.

World-wide total sales, excluding Delta Lloyd and RAC, totalled £9,701m, down 3% (or 4% on a constant exchange rate basis) from £9,958m in the fourth quarter of 2011.

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Long-term savings sales were down 5% at £7.5bn from £7.8bn a year earlier, as a result of tough market conditions. General insurance and health net written premiums were level with last year at £2.2bn.

The group's general insurance combined operating ratio, also excluding Delta Lloyd and RAC, improved to 96% from 97% in the first quarter of 2011; the combined operating ratio measures how well a company takes on insurance risk, and a lower figure is better.

In life assurance the new business internal rate of return eased to 13.3% from 13.7% in the first quarter of 2011.

Profitability in both the general insurance and life assurance businesses were in line with targets.

Aviva's estimated Insurance Group Directive (IGD) solvency surplus at March 31st 2012 was £3.2bn, up from £2.2bn at the end of 2011, and little changed from the end-February number of £3.3bn.

Aviva generated £0.5bn operating capital in the first quarter and the IFRS {International Finance Reporting Standards) net asset value per share increased to 445p from 435p at the end of 2011.

"We have begun the process of identifying a new CEO for the Group, internally and externally," revealed John McFarlane, Executive Deputy Chairman. "We expect this will take the remainder of this year, as we need to appoint the best person in the world available to us. In the interim, I will act as Executive Chairman to ensure we take the necessary actions and decisions to improve the standing and performance of the group, and to accelerate these actions," McFarlane added.

JH