Sheridan Admans says:
"This morning Aviva reported a solid start to 2012. Operating profit for the first quarter of 2012 is down slightly on the same period last year, but taking away the effects of the sale of RAC and the de-consolidation of Delta Lloyd, this actually shows a slight increase. Aviva generated £0.5bn operating capital in the first quarter and the net asset value per share increased to 445p from 435p at the end of 2011.
"Aviva continues to suffer from economic head winds but still delivers a reasonable start to the first quarter. Long-term sales were down slightly on the same period last year with general insurance and health premiums level.
"Investors will be keen for an appointment of a new CEO to drive the business forward. In the interim John McFarlane, executive deputy chairman, will act as executive chairman with the challenge of improving Aviva's capital and financial strength for which a framework has been set out to achieve the company's goal. The framework should include a strategic review of all its businesses, improve the balance sheet and re-direct capital to improve profits and value.
"We continue to recommend investors looking for exposure to the insurance sector 'buy' Aviva . Investors need to be and comfortable with the majority of exposure to the UK and Europe and some in North America and Asia. Aviva has a very attractive yield which looks adequately covered. It continues to deliver profitable growth and seems to be making good headway focusing the Group on its core activities, where it has increased its presence in its priority markets."
