A Cheap Sector Showing 24% Growth Motley Fool UK
". Those disposals were the sale of the RAC for £1bn and the flotation of the majority of Delta Lloyd, a Dutch insurer.On an underlying basis, Aviva's operating profits were up 13%, including a surprising 21% profit rise in Europe despite the eurozone's woes. Savings rates are going up as worried Europeans are battening down the hatches. It's the same story in the UK, where the savings ratio is the highest for six years.
The internal rate of return on new life assurance business rose from 12% to 14%, while the general insurance business saw the combined operating ratio (COR) improve from 97% to 96%. Saying that it was on track to deliver £400m cost savings by 2012, Aviva increased its interim dividend by 5%.
So will value finally out at Aviva? Its core franchise is superlative: it's the number one insurer in the UK, which is the third-largest insurance market worldwide. It is pursuing a programme of reducing debt by £700m. And it has finessed its strategy to focus on twelve core markets where it generates more than $100m of profits, plus China and India.
