Aviva (AV.) provided a third-quarter sales update which confirmed the firm's progress in increasing sales and attaining its goal of an internal rate of return of 12%. Unfortunately, Aviva, following the custom of European insurers, did not provide either an income statement or balance sheet in the third-quarter update so we are unable to analyse third-quarter results and our fair value estimate is unchanged. The firm did state that it is on track to achieve the best margins it has seen in the past five years and that it is executing on its announced goal of improved profitability. Aviva disclosed that its Lif
e and Pensions business grew 15% on the top line on a year-over-year basis and that general insurance (property-casualty) is operating at a 3% underwriting margin. Given the limited information available it would appear that Aviva is executing on its goal of improved underwriting results through increased sales coupled with cost savings, but we will reserve judgment until the firm provides complete financials early next year.
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