Excluding COVID-19 impacts on general insurance claims (GBP (165) million), operating profit was flat year on year, with strong results in UK annuities and the continued recovery in our Canadian results offset by higher weather claims across our general insurance businesses and additional expenditure related to community support initiatives.
- Operating profit: GBP 1,225 million (-12%), of which:
- UK Life and IS&R: GBP 817 million (+9%)
- General Insurance: GBP 167 million (-50%)
- International Life: GBP 367 million (-6%)
- Value of new business: GBP 601 million (+12%), of which:
- UK: GBP 323 million (+60%)
- Europe Life: GBP 188 million (-21%)
- Asia Life: GBP 90 million (-6%)
- Group combined ratio: 99.8% (-3.0 pp.)
Operating capital generation (OCG) increased to GBP 890 million (1H2019: 780). Underlying OCG fell to GBP 534 million (1H2019: 679), which included a GBP 258 million negative impact from COVID-19 general insurance claims and associated increase in SCR. Total OCG benefited from GBP 356 million of management actions (1H2019: 101) including initiatives that reduced SCR such as de-risking, asset allocation and hedging actions taken in response to COVID-19, and planned changes to internal reinsurance arrangements.
At 30 June 2020, Aviva's solvency surplus was GBP 12.0 billion and cover ratio 194% (FY2019: GBP 12.6 billion / 206%). Solvency II net asset value per share was 416 pence (2019: 423 pence). Operating capital generated (OCG) during the first half was more than offset by capital market movements primarily in relation to lower Government bond yields and widening of credit spreads on corporate bonds plus allowances for potential future credit rating migration in our corporate bond portfolio and reductions in future UK property values.
"We will focus Aviva on our strongest businesses in the UK, Ireland and Canada and aim to be the UK's leading insurer. We are going to focus on those businesses where we have the necessary size, capability and brilliant customer service to generate superior shareholder returns. This is where we will invest and grow. Where we cannot meet our strategic objectives, we will take decisive action and we will withdraw capital.
Aviva's financial performance in the first half of 2020 was solid. Our financial position is strong and operating profit of GBP 1.2 billion was robust, thanks to our diverse range of products, excellent partners and our swift operational response to the COVID-19 pandemic. (...) The Board has declared a second interim dividend in respect of the 2019 financial year of 6 pence per share. (...)
I have been CEO for one month and I am confident we have many of the ingredients to make Aviva a winner. From this moment on, we must deliver. Nothing else will do. My focus is making sure it happens and at pace."