What happened?
. UK GI: Personal motor pricing is softening, but home is hardening. Mixed picture on commercial, depending on the line. PYD ''consistent'' with HY (not clear whether this means further additions, or limited contribution); weather in-line at 3Q with budget (which is low in this quarter). They are increasingly positive on the opportunity for Probitas.
. CANADA GI: Management sound confident they are achieving rate ahead of claims inflation. Small positive PYD development in 3Q, slightly offsetting the very elevated cat.
. IWR (LIFE): Multiple factors contributing to the strength of Platform flows - for instance the new transition service. Still guiding to 3% VNB margin on annuities for FY24, suggesting a slight fade from stronger 9M. Management sounded optimistic about individual annuity volumes from here, with the UK budget potentially catalysing financial planning. Individual protection volumes are lower across the market, so Aviva is not the exception - ABI indicate down 6% at HY, and this reflects factors such as cost of living and fewer housing transactions.
. REGULATION/CONDUCT: Confident that they are not likely to be negatively impacted by the protection review given their focus on good outcomes for customers. Confident there is no read-across from Motor Finance case, not least because they think they offer good value for money - although we caution it''s difficult to see how one could get full confidence on this at this stage given the case law itself is still in development.
BNPP Exane View:
Management expressed confidence on conduct topics, both related to the FCA review of protection and the read-across to insurance (or lack thereof) from the Motor Finance ruling: this is helpful, although we think it''s difficult to draw a line under topics like this. We''re surprised to see the shares outperforming 4%; this might be explained by reiteration of targets and capital return policy, if the market was worried about the...
