Aviva plc: history, ownership, mission, how it works & makes money

A Brief History of Aviva plc

Aviva plc, a British multinational insurance company, traces its origins back to 1696 with the establishment of the Hand in Hand Fire & Life Insurance Society. The company we recognize today was formed through several mergers and acquisitions that shaped its evolution in the insurance industry.

In 2000, Aviva rebranded from its previous name, CGU plc, following the merger of Commercial Union and General Accident. This merger created one of the largest insurance groups in the UK.

Aviva's significant expansion continued in 2006 when it acquired the life insurance operations of the Dutch insurer, Delta Lloyd. This acquisition added approximately £7 billion in assets under management to Aviva's portfolio.

In 2011, Aviva announced a restructuring plan aimed at streamlining operations and focusing on core markets. Reported revenues for that year stood at approximately £26.8 billion. The restructuring resulted in a reduction of workforce, which was part of a strategy to enhance profitability.

By 2012, Aviva's operational focus had shifted mainly to its UK business, representing around 44% of total premiums collected. In the same year, Aviva reported profits attributable to shareholders amounting to £1.22 billion.

The company faced challenges in 2013, resulting in a drop in stock prices and a market capitalization loss of about £3 billion over the year. However, they made significant strides in improving customer service and product offerings.

In 2015, Aviva completed the acquisition of Friends Life Group for approximately £5.6 billion, significantly bolstering its position in the UK life insurance market. This acquisition increased Aviva's market share to over 25% in the life sector.

As of 2020, Aviva announced a major strategic review, leading to divestitures of non-core businesses, including the sale of its stake in Aviva Singapore for approximately £1.6 billion. This move allowed the company to focus on expanding its operations in the UK and Ireland.

In terms of financial performance, Aviva reported a total revenue of £23.6 billion for the financial year ending December 2022, with a net profit attributable to shareholders of £1.5 billion.

Aviva continues to invest in digital transformation and customer engagement strategies to adapt to changing market dynamics and customer needs. By focusing on improving its operational efficiencies while enhancing its product offerings, Aviva aims to solidify its position as a leading insurer in the UK and expand further into international markets.

A Who Owns Aviva plc

Aviva plc is a prominent British multinational insurance company headquartered in London. As of October 2023, the company is publicly traded on the London Stock Exchange under the ticker AV. Ownership of Aviva is dispersed among various institutional and individual investors, with a significant proportion held by asset management firms.

Major Shareholders

The largest shareholders of Aviva plc include a mix of institutional investors. Here is a summary of the key shareholders:

Ownership Breakdown

The ownership structure of Aviva plc reflects a diverse mix of institutional and individual investors, with a significant focus on large asset management firms. The following data provides a detailed breakdown:

Recent Developments

In 2023, Aviva has undergone strategic shifts aimed at enhancing its portfolio and shareholder value. The company has focused on divestitures and optimizing its operations across key markets. Recent reports indicate that the company is enhancing its sustainability initiatives, which may attract additional ESG-focused investors.

Stock Performance

As of October 2023, Aviva's stock performance has shown resilience with a year-to-date increase of approximately 15%. The share price fluctuates based on market conditions, with current trading around £515.00 per share, reflecting positive investor sentiment.

Financial Highlights

Aviva plc reported the following financial results for the first half of 2023:

With its robust portfolio and strategic initiatives, Aviva continues to attract a range of investors, underpinning its position in the insurance sector.

Aviva plc Mission Statement

Aviva plc defines its mission statement as a commitment to "become the leading digital insurance provider, helping our customers secure their financial future." This mission is reflected in its strategic objectives, which focus on meeting customer needs through innovative solutions, simplifying processes, and leveraging technology.

In 2022, Aviva reported a significant increase in net profit, achieving £2.5 billion, up from £1.5 billion in 2021. This growth underscores the effectiveness of their mission in driving financial performance.

Aviva is also committed to sustainability. In 2020, it pledged to achieve net-zero carbon emissions by 2040 and has made substantial progress towards this goal. They disclosed that as of 2022, they have reduced their operational carbon emissions by 23% since 2019.

The company focuses on key areas to fulfill its mission, including:

• Customer engagement and service quality.
• Digital transformation and innovation.
• Financial inclusion and responsible investing.

Aviva’s strategy is supported by its financial metrics. Below is a table summarizing key financial data from the past three years:

Aviva's focus on digital channels is evident in its growing customer base. As of 2022, over 50% of its new policies were sold through digital platforms, highlighting a significant shift towards online services.

In terms of market presence, Aviva serves approximately 18 million customers across the UK, Europe, and Asia. This widespread reach supports its mission to enhance financial security and foster trust in digital solutions.

The company's emphasis on employee engagement aligns with its mission. In 2021, Aviva received a 78% approval rating from employees regarding their workplace culture, which reflects Aviva's commitment to fostering a positive environment to achieve its goals.

Overall, Aviva plc’s mission statement is not merely a declaration but is intricately linked with its operational strategies and financial performance, demonstrating a clear path toward its vision of digital leadership in the insurance sector.

How Aviva plc Works

Aviva plc is a leading British insurance company that operates in various segments like life insurance, general insurance, and asset management. As of the end of 2022, Aviva reported total revenues of approximately £8.9 billion, showing a robust performance in its core markets.

Business Segments

Aviva's operations can be divided mainly into three segments:

• Life Insurance: This segment contributes significantly to the company's revenue, accounting for around 60% of total income. It provides products such as savings, retirement, and protection solutions.
• General Insurance: Contributing about 30% to revenue, this segment includes home, motor, and commercial insurance products.
• Asset Management: This segment represents approximately 10% of total revenues and oversees £360 billion in assets under management.

Financial Performance

For the year ended December 2022, Aviva's key financial metrics were as follows:

Investment Strategy

Aviva's investment strategy focuses on balancing risk and return, ensuring financial stability and growth. The company has a diverse investment portfolio, with the following allocations as of the end of 2022:

• Equities: 40%
• Fixed Income: 45%
• Real Estate: 10%
• Alternatives: 5%

Market Position

Aviva holds a strong position in the UK insurance market, being one of the top three providers in both life and general insurance sectors. Market share percentages are as follows:

Recent Developments

In 2023, Aviva announced a strategic focus on digital transformation and enhancing customer experience, committing around £300 million towards technology upgrades and innovation. This is expected to improve operational efficiency and customer engagement metrics.

In addition, the company has made strides in sustainability, targeting a net-zero carbon footprint by 2040 and integrating environmental, social, and governance (ESG) factors into its investment processes.

Conclusion

Overall, Aviva plc continues to evolve within the dynamic insurance landscape, leveraging its strengths across various business segments. The company's financial stability, combined with a strategic focus on innovation and sustainability, positions it favorably for future growth.

How Aviva plc Makes Money

Aviva plc, a leading UK-based insurance and financial services company, generates revenue through various channels, primarily focusing on life insurance, general insurance, and asset management. As of 2022, Aviva reported a total revenue of approximately £10.8 billion.

Life Insurance

Life insurance represents a significant portion of Aviva's income. The segment includes both individual and group life insurance products, such as term life, whole life, and endowment policies. In 2022, Aviva's life insurance business accounted for about £6.1 billion in revenue. The total new business sales in this category rose by 11% year-on-year, driven by increased demand for protection products.

General Insurance

Aviva's general insurance division covers various products, including home, motor, and commercial insurance. In the fiscal year 2022, this segment generated a revenue of approximately £3.5 billion. The claims ratio stood at 95%, indicating effective management of losses and expenses. Policies sold in the personal motor insurance market totaled around 1.5 million during the same period.

Asset Management

Aviva Investors is the asset management arm of the company, managing funds across multiple asset classes, including equities, fixed income, and real estate. In 2022, Aviva Investors reported assets under management (AUM) of approximately £300 billion, contributing around £1.2 billion to overall revenues. The management fees earned from this segment have seen a steady increase of 5% annually.

International Operations

Aviva has expanded its operations internationally, particularly in Canada and Asia. The company generated approximately £2 billion in revenue from its Canadian operations in 2022, driven by retail insurance and group benefits. In Asia, Aviva focused on partnerships and joint ventures, which contributed around £800 million to the overall revenue.

Investment Income

Investment income from Aviva's own portfolio of investments also plays a critical role in its revenue generation. In 2022, Aviva reported investment income of approximately £1.5 billion. The investment portfolio consists significantly of government bonds, corporate bonds, and equities, which are strategically managed to optimize returns.

Distribution Channels

Aviva utilizes multiple distribution channels, including direct sales, intermediaries, and digital platforms. In 2022, digital sales represented around 20% of total new business sales. The company also has partnerships with banks and other financial institutions, which significantly bolster its market reach.

Overall, Aviva plc’s diverse revenue streams, effective management of expenses, and strategic international expansion contribute to its robust financial performance. The steady growth across life and general insurance segments, bolstered by asset management services, positions Aviva as a strong player in the financial services sector.