Impressive results that should give the share price a much-needed lift

AVIVA’s results and strategy update should cheer investors for several reasons. The winter weather that has hindered other insurers’ results didn’t even dent its £2.4bn pre-tax profit.

Its strength in life insurance and commitment to cost-cutting are welcome, particularly against a backdrop of new regulation such as the ban on using gender in insurance calculations and higher capital requirements due in 2012.

These results will also feed investor hopes of fixing Aviva’s long-time share price shortfall. Analysts’ consensus rating on the stock is a “buy” – because at 457p today it is still about 40 per cent cheaper than its 740p trading price in mid-2007.

In contrast, its peers are less than ten per cent short of their 2007 prices. Prudential has regained about 94 per cent of its former value while Legal & General has about an eight per cent gap.

Aviva’s shares are rising: they have gained 19 per cent over the past year and 11 per cent since the end of 2010.

These impressive results may give its stock the boost needed for further shareholder value to materialise.