Aviva sets 12% SII ROE target

Written by Adam Cadle

20/11/2019

Aviva has set a new 12% Solvency II (SII) ROE target by 2022 as part of its strategy update, calculated as own funds generated divided by own funds.

The FY18 SII ROE was 12.5% comprised of 9% from underlying and 3% management actions.

Aviva said the 2022 target assumes c.1% from management actions thus increasing the underlying ROE to 11%. Divisional ROEs underpin this group target and on an unlevered basis the combined UK life and Investment Savings & Retirement (IS&R) ROE is expected to decline from 11% in 2018 to 9.5% in 2022 but FY18 did include 5ppts from longevity releases.

The general insurance ROE is expected to increase from 10% in 2018 to 14% in 2022 helped by the turnaround in Canada. Europe life is expected to increase from 7% to 9.5% driven by a shift towards capital light business and Asia life is expected to increase from 10% to 15% as it seizes on long term growth opportunities.

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