Aviva Results 7-Mar: Capital Generation And Deployment

Aviva (AV/ LN) FY23 results are out tmrw (7-Mar) with the key debate being around equity buyback, acquisition spending and capital generation. This will be key to the cash curve movements, we feel. Its curve has traded tighter YTD with the EUR lines better over the last week, too – there appears a lot of expectation priced in, we feel.

• The third quarter update (16-Nov) was reasonably positive with weather claims (incl. Canada P&C catastrophe losses) seen as manageable and included a re-affirmation of medium-term targets. The Solvency 2 ratio was 200% (from 202% at Jun-23).
• Outlook: market will be looking for updated mid-term guidance, alongside a GBP300-350m buyback seen by sell-side (300m in FY23). The equity market is looking for increased capital returns, alongside deals to access growth (see Probitas, AIG Life and Optiom recently). News from the CMA (UK competition regulator) expected on AIG Life by 8-Apr.
• Other: There is a story out surrounding ONS mortality stats showing a 40-44yo death spike, which may hit, in the mid-term, insurance profits – we may see questioning on this.