Okay. Good morning, everyone. It's absolutely fantastic to see you all here. Thank you for joining us for our full year 2022 results presentation. I'm gonna start today with a brief update on our full year performance, covering the key parts of today's announcement. Charlotte will take you through our results in more detail, and then I'll update you on the strategic progress that we're making here at Aviva. Finally, of course, we move into your favorite bit, which is the Q&A. Before we get stuck in, I wanted to start by thanking all of my Aviva colleagues for their contribution to the results that we have announced this morning. In the face of a very challenging year, the team really delivered.
Every single customer that chooses Aviva, every single life or business that we protect, every single claim that we handle well is down to our people and their ability to deliver for our customers. We can only present these results because of what they do every day. A very big thank you to the Aviva team. Turning to the results, Aviva had an excellent 2022. As you will have seen, we delivered strong results throughout the year. We have demonstrated consistent and reliable momentum. We've done that by focusing on disciplined, profitable growth and tight cost control. Our capital position remains very strong and has proven resilient in the face of considerable market volatility. We have demonstrated once again that our strategy is the right one, and that the diversified business model that we have built is working.
Importantly, together with delivering this strong performance, we have also invested for Aviva's future, just as we said we would. We've invested to improve customer experience, to drive further cost reduction, and in bolt-on M&A where it makes sense. We completed a GBP 4.75 billion capital return program during 2022. The momentum and consistency in our performance, together with our capital strength, now allows us to go further, as we said we would. Today, we have announced a new GBP 300 million share buyback scheme, which starts immediately, delivering on our promise to be disciplined in our capital management. We have also delivered on our dividend promise for the year. Today, we announced a further upgrade to our dividend guidance. More on this later.
Finally, we have been actively supporting our customers, communities, and colleagues as the U.K. wrestles with financial inclusion and the worst cost of living challenge that we have seen for decades. Looking then at the results. Aviva is growing. Value of new business is up 15%. Gross Written Premiums are up 8%, and we've had over GBP 9.1 billion of net flows into the Wealth business. our costs continue to fall, and we're down 3% on last year. We've maintained our focus on cost discipline despite the significant inflationary pressures. Profitability is strong, with Own Funds Generation at 37% and Operating Profit up 35% on last year. We've delivered an impressive overall combined operating ratio of 94.6%, despite the impact of inflation and adverse weather in the U.K.
This demonstrates the benefits of the scale and diversification of our General Insurance businesses in the UK, Ireland, and Canada. Finally, cash generation of GBP 1.8 billion was up 11% on the previous year. With good visibility of Cash Remittances over the coming years, we expect to exceed our 3-year cash target. These results are testament to the progress that we've made over the past two years. We have simplified the business, built resilience, and further embedded a performance culture at Aviva. As we have said repeatedly, our strategy is very deliberately customer-led. Putting customers first is critically central to everything that we do, and we're bringing this to life on a daily basis. In 2022, we paid GBP 23 billion in claims and benefits. We launched Quote Me Happy Essentials, helping customers access lower cost Insurance products.
We committed GBP 9 million to support communities through the U.K.'s Citizens Advice and the Money Advice Trust. We've supported 9,000 of our colleagues with one-off payments to help with rising energy costs. We made it easier for customers to do business with us by making over 200 improvements to MyAviva and Aviva Connect. We had half a million new MyAviva registrations. I want to highlight this because it is important. MyAviva customers are more than twice as likely to buy a second policy from us. We continue to enjoy strong out to an online experience scores, and we are seeing the benefits of all of our actions and our ability to grow our franchise. We have over 18.7 million customers, including 15.5 million in the U.K. More than one in four adults in the U.K. is an Aviva customer.
This year, we've won over 370 new workplace schemes. We have scale, but we're also delivering growth. Despite the challenging backdrop, growth remains positive right across Aviva's I nsurance, Wealth, and Retirement businesses. In Insurance, Jason and the team in Canada grew commercial lines by 14%, with great performance in mid-market and GCS. In personal lines, they grew our key RBC partnership and our direct channel. In fact, Aviva is now the number two insurer in Canada. Just one more to go, Jason. In the U.K., Adam and the team delivered 13% growth in our GI Commercial SME business, and we also saw strong growth in Group Protection and Health. In Wealth, workplace net flows were up 14% to GBP 6 billion, driven by strong retention, new scheme wins, and the inflationary impact on salaries.
In Aviva Investors, Mark and the team delivered positive net flows of GBP 1.3 billion from our external clients in an extremely volatile year. Aviva Investors were recently ranked third in ShareAction's report on the responsible practices of the world's largest asset managers. Finally, in our retirement business, we transacted on 50 BPA deals in 2022, with GBP 4.4 billion of premiums at very strong margins. The BPA pipeline is positive as we look to 2023 and beyond. We announced an GBP 850 million buy-in transaction with the Arcadia scheme just last month. We've also seen strong growth in individual annuity sales, external, which were up nearly 70%.
We know that we continue to face into a very challenging macro environment. We have momentum, which is fueled by the right strategy, the right people, and the right purpose. Turning now to Capital Return and Dividend. Charlotte will talk through our capital framework in a minute. Our commitment remains for a strong and sustainable ordinary dividend, supplemented by regular and sustainable returns of surplus capital over time. Today, we delivered on our commitment to further shareholder returns. As you will have seen, we announced a new GBP 300 million share buyback program starting immediately. This takes total capital returns to shareholders to over GBP 5 billion since 2021. As I said earlier, we have also upgraded our dividend guidance today, recognizing that share buybacks will otherwise reduce the overall share count.
Our confidence in the performance trajectory of Aviva and in the positive outlook for cash generation means that we now expect to grow the cash costs of our dividend by low to mid-single digits. In summary, our plan and strategy to transform Aviva remains unchanged. It centers around our four strategic priorities of customer, growth, efficiency, and sustainability. It is the right strategy for Aviva, and we are making great progress in executing on it, and it is unlocking the competitive advantage of Aviva's model. In turn, our strategy is delivering higher quality and more consistent financial performance that will benefit our shareholders. This underpins our confidence in the delivery of our targets. As you will hear later, we are on track to exceed our OFG and cash remittance targets and to deliver on cost reduction.
I'm now gonna hand over to Charlotte, who's gonna go through the financials, and after that I'll come back and update you further on our strategic progress before we head to Q&A. Over to you, Charlotte.
Thanks, Amanda. Good morning, everybody. I'm delighted to take you through the highlights of an excellent year for Aviva. We've continued to see positive momentum across the group. We've delivered great results across all key metrics. Funds generation was up 37%, supporting the growth in sustainable Cash Remittances, which were up 11% to GBP 1.8 billion. There was a strong improvement of Underlying Operating Profit, up 24%, with Total Operating Profit up 35% to GBP 2.2 billion. Importantly, costs continued to fall, down 3% on the prior year. Despite market volatility in the second half of the year, our capital position remains robust at 212%.
This is 207% on a pro forma basis and 196% after payment of the final dividend and the completion of the share buyback. These results really demonstrate that our diversified model is working. Let me talk you through the business unit highlights before returning back to the group performance and balance sheet. I'll start with UK and Ireland Life, which operates across Insurance, Wealth, and Retirement. This business has had a great year. We have seen strong growth across the key profitability measures. Total Operating Profit and OFG were up 34% and 44% respectively, with the core business performance very strong. Underlying Operating Profit was up 21% and Underlying OFG up 17%. On new business, VMB is up 15% to GBP 767 million.
This is a very good result, achieved against the headwind of higher interest rates, and it is well ahead of our ambition of 5%-7% growth per annum. Importantly, we've seen margin improvement across all three segments. Now I'll go through the components of the UK and Ireland Life result in a bit more detail, starting with Protection and Health. Sales were up 6%. We saw strong growth in Group Protection and Health, up 29% and 14% respectively. Partly offset by Individual Protection, where APE was up, but PVNBP was down or lower because of higher interest rates. This was a strong outcome given the prior year benefited from the impact of stamp duty relief. Across Protection and Health, we also achieved a higher VNB, up 18% and saw margins improve.
Operating Profit was flat as we didn't see the repeat of 2021's favorable claims experience in Group Income Protection, which also impacted the relative Own Funds Generation. Moving now to our Wealth business, which has performed well in a challenging environment. Net flows of GBP 9.1 billion across workplace and platform were extremely robust as 6% of opening AUM. In workplace, net flows were up an impressive 14% to GBP 5.8 billion as we saw new scheme wins, strong retention, and the benefits of wage inflation coming through on contributions. In platform, we were number two measured in net flows. Consistent with the market, we saw reduced demand with net flows of GBP 3.9 billion, which is down 32%, amid market volatility and the impact of cost of living inflation for our customers.
We expect platform net flows to remain challenging in the near term. That said, we are well-placed to capture available flows with a platform that is highly regarded in the market for its functionality and competitive pricing. On assets under management, completing the Succession Wealth acquisition added GBP 3 billion. Own Funds Generation saw a strong increase in 2022, up 96%. This was driven by new business, a growing in-force book, and improved cost efficiencies, including a one-off expense provision release. Excluding this one-off effect, OFG was up 50%. Operating Profit was lower due to the impact of market volatility on revenues and because of an adjustment to cost allocations. Excluding this impact, it's broadly flat.
Lastly, in our retirement business, of the GBP 6.2 billion of sales, bulk Annuity volumes were GBP 4.4 billion as we maintained our pricing discipline, especially in the thin markets of Q4, where trustees focused their attention on liquidity in the wake of the LDI crisis. equity release saw strong growth in sales of 17%, partly offset by individual annuities where we maintained pricing discipline. We had another solid year of asset origination supporting the Annuity business, a key area of strength where the Aviva Investors team have again proved the value of the business in supporting UK Life. The higher allocation of illiquids and pricing discipline meant the margins on BPAs improved to 5.1% and VMB increased by 6%.
OFG and Operating Profit for the retirement business increased by 34% and 32% respectively, benefiting from both the improved asset mix as well as favorable experience variances. Looking forward, we continue to see a positive outlook for BPAs in the medium term due to the improved funding positions from the higher rate environment and the very evident increased appetite from trustees to de-risk. Moving to our General Insurance business, where we have deliberate diversification across geographies, products, and channels. This means we're able to grow the business in a targeted and profitable way, as we did in 2022, where premiums were up 11%. Group COR was 94.6%, which is an excellent result, especially when considering the return to more normal claims frequency as well as the inflationary environment for which we continue to price appropriately.
The quality of the underlying result was extremely strong, with low reliance on prior development and weather broadly in line with long-term averages. Operating Profit was at 1% as more normal claims frequency and elevated inflation impacts were more than offset by improved reinvestment yields. In UK and Ireland, premiums grew 7% to GBP 5.7 billion. Within that, Commercial lines grew 12%, evenly split between rate and volume. In Personal lines, premiums were up 2%, with our principal focus on maintaining pricing discipline in the inflationary environment. We have high expectations for this business, as we outlined in January. The COR of 96.1% for UK GI is a really good result. It demonstrates strong risk selection, disciplined growth, and our proactive response to inflation.
We continue to leverage and invest in our claims processes and the value of our Solus network to ensure good customer outcomes and strong claims cost management. Operating Profit was down 5% as an improved investment result mostly offset frequency and inflation impacts. In Canada, we had another fantastic year and the business is going from strength to strength, achieving further profitable growth. We enjoyed strong growth in both Commercial lines and Personal lines. In commercial, premiums were up 14% in constant currency owing to strong new business growth in mid-market and large corporate. Personal lines grew 6% in constant currency, and we put through rate increases in Ontario Auto and made great progress with our key RBC partnership. We achieved a very strong COR of 92.5%.
This is a little higher than the prior year, as similar to our UK experience, in Canada we also saw claims frequency return to more normal levels. Within the claims ratio, there was a very modest impact for positive prior year development and favorable weather impacts as we experienced minimal cat activity in the year. Higher investment returns also helped to increase the Operating Profit by 6%. Before we move away from General Insurance, I'd like to update you on our recent ReInsurance Renewals. You'll be aware that it's been a very challenging market, but we were able to fully place our cat ReInsurance program. We achieved lower risk-adjusted rate increases than the double-digit averages seen in the market, which in turn we are now pricing for. Like most, we did raise our retentions given the market capacity and pricing.
Return periods are still below many of our peers, and retention levels are broadly flat when allowing for portfolio growth. We were also pleased to renew our cat agg cover to protect capital and earnings in the case of multiple events, an important differentiator versus many in the market. The changes to the reInsurance program have led to an increased capital requirement. Importantly for Aviva, this is only about 5 points on the group cover ratio, which is lower than it would be for a standalone GI business, another benefit of our diversified model. Overall, it was a good outcome and supportive of our strategy and growth plans. Turning now to Aviva Investors, the business has been making good progress with its strategy and structure and focus.
Because of the extremely difficult market conditions for all asset managers, on the face of it, the results don't yet demonstrate this. Assets under management about GBP 45 billion lower than last year, mostly driven by the impact of weak investment markets. External net flows remained positive at GBP 1.3 billion and included about GBP 0.6 billion in Q4 as we ended the year well. Importantly, we've completed a number of structural cost reduction initiatives which have delivered GBP 50 million of savings. This includes major outsourcing of both operations and loan servicing. These are critical levers to improve efficiency, continue the turnaround, and allow progress towards our target cost income ratio when revenue strengthens. Whilst the revenue outlook remains uncertain, we have started this year well. The team is fully focused on the path ahead.
As I have spoken about earlier, Aviva Investors plays a critical role for the group, particularly for the retirement on Wealth businesses. Secondly, the review of the Individual business units, so letting me return now to the group. I'll start with the progress we're making towards our group targets. I'm pleased to report that controllable costs are down 3% year-on-year to GBP 2.8 billion, which represents 11% reduction from the 2018 base. This is continued good progress towards our GBP 750 million cost reduction target. We achieved a further GBP 200 million of cost reduction or 7% in 2022, which takes the total to GBP 575 million and means we are firmly on track to meet our target by the end of 2024.
Once we re-reach this target, to repeat what we've said in the past, we intend to maintain this strong focus on efficiency to deliver quartile efficiency ratios for each of our businesses. As well as making great progress on efficiency, I'm pleased to say we've been growing at the same time. Let's start with Own Funds Generation, where our target is to achieve GBP 1.5 billion annually by 2024. Own Funds Generation grew by 37% year-on-year. 2022 includes the benefit of higher balance sheet actions of GBP 597 million, more than we typically expect to see. Principally, they're due to positive longevity benefits and expense assumption changes reflecting the cost reductions achieved by the group.
On an underlying basis, OFG was up 15% to GBP 1 billion as we saw strong growth coming from our wealth and BPA businesses. Given our progress, we expect to exceed our target of GBP 1.5 billion by 2024, even allowing for a more normalized level of management actions. While the actual amount of management actions may differ in any given year, we expect these typically around GBP 200 million. This capital generation is translating into growth in Cash Remittances, which were up 11% to GBP 1.8 billion. Our cash remittance target is for more than GBP 5.4 billion between 2022 and 2024, and we expect to exceed the 5.4. Moving now to capital. Our shareholder solvency coverage ratio remains extremely robust at 212%.
Our balance sheet showed resilience in the face of market volatility in 2022. We maintained a strong capital position throughout. The development from full year 2021 was driven by a combination of the GBP 3.75 billion capital return, dividends, the acquisition of Succession Wealth, and GBP 500 million of debt reduction. We've generated about 14 points of solvency from operating capital generation through the year, and we've benefited from 17 points of non-operating capital generation, principally for the impact of rising rates. We still have further debt reductions to complete, and the GBP 75 million that was committed to the pension schemes was made in Q1. Taking these items into account, our pro forma cover ratio is 207%. Taking the final dividend and the share buyback into account, our estimated cover ratio will be about 196%.
Our pro forma leverage ratio is 30%, and center liquidity at the end of February is GBP 2.2 billion. Finally, just a reminder of our capital management policy, which remains unchanged and is predicated on a solvency coverage ratio of about 180%, center liquidity of around GBP 1.5 billion, and a leverage ratio of under 30%. We also seek to maintain A A credit ratings. To recap, Surplus Capital has three main purposes. First, we are investing in the business to drive targeted, profitable growth and efficiency, which as 2022's results demonstrate, is performance enhancing. Secondly, we continually screen potential bolt-on M&A opportunities that are in line with the strategy in our core markets and meet or exceed higher rates. Examples are the recent acquisition of Succession, Azur AXA XL High Net Worth.
Third, we make additional returns to shareholders, releasing excess capital as we have announced today, and we anticipate further returns in the future with our preference being that these are regular and sustainable. In summing up, I've now been at Aviva for six busy and productive months. During this time, I've lived the market turbulence following the Mini-Budget in September. I've led the business and performance reviews, as well as the forward planning and resource allocation round. I visited most parts of our group to really understand our culture and customers and how we serve them. This stage of Aviva's journey is all about delivery, execution, and focused growth in our core markets. We're making great progress with this, and we're firmly on track to exceed our OFG target, to beat our Cash Remittances target, and deliver on cost reduction.
We've launched the new share buyback of GBP 300 million. We have upgraded our dividend guidance. Thank you. With that, I'll hand back to Amanda.
Thanks Charlotte. It's great to have Charlotte here for her first full annual results at Aviva. You've heard about our strong delivery last year. Now, I want to talk to you about why we're optimistic for the future. In 2020, I set out three clear commitments: to focus the portfolio, to rebuild financial strength, and to transform performance. We delivered a focused portfolio and financial strength with our divestments, which generated excellent value for shareholders. What you are now seeing is the transformation of the performance of this business. We've come a long way in 2022, but there is still much more to go after. Let me tell you about our strategic progress and how we're investing in Aviva's future to secure that performance, that cash generation and ultimately dividends. Aviva has a bright future.
I can say this with confidence because we have strong, focused businesses with market-leading positions and unrivaled customer franchise and the number one brand in the market. This is a fantastic position of strength to build on. We know it's tough out there with the cost of living crisis, high inflation and macroeconomic uncertainty. Even in these difficult times, we are driving growth from a rich seam of opportunities across our business. Let me give you some examples. There is substantial pent-up demand for pension risk transfers, which we will capitalize on with our leading BPA offering. Increased pressure on the NHS means more people are looking to take out private medical cover, and we have a strong proposition here. There is growing demand for pension savings and retirement solutions because of low unemployment and an aging UK population, and we can capitalize on this.
Even regulation can offer opportunities to grow. Solvency II reform will allow us to put more money into infrastructure across the UK, including schools, hospitals, social housing, and green energy. That's positive for our business, but it's also positive for customers and for communities. All of these opportunities gives us the confidence to continue to invest in our business. During 2022, you remember that we committed GBP 1 billion of investment back into Aviva. We're putting GBP 500 million into accelerating organic growth and efficiency improvements over three years. We acquired Succession Wealth to close the capability gap in advice, and we have recently acquired the Barclays Home Insurance back book, allowing us to further enhance our market-leading position in home Insurance in the UK. We have made bolt-on acquisitions to grow our high net worth General Insurance business.
We have the right strategy, but we're only really just starting to realize the full potential of this business. The investments that we are making will further strengthen our competitive advantage across customer, diversification, and scale, and we will ensure a strong future for Aviva for many years to come. Now, let's take each of those four strategic priorities in turn, starting with customer. We obviously want more customers to stay with us for longer so that we can look after more of their needs, and we're making really good progress here, as you heard from me earlier. What's next for customers? We are building an engaging mobile-led customer experience. We've already driven over GBP 600 million of gross fund flows through our enhanced MyAviva digital pension journey, so we know that we can generate results here.
On brand, we want to be number one for trust and consideration across all of Insurance, Wealth, and Retirement markets. We'll help customers better understand our offering by continuing with our Making It Click campaign in the UK, which showcases the breadth of financial puzzles that we can help our customers solve. We will also partner with key employee benefits consultants to bring the best of Aviva to our customers. This will help us to grow the number of corporate customers who hold more than one product from Aviva, which is already about 30%. We're also investing in innovation, and as we know, this is critical for us to stay relevant over time, and I'm really pleased with the momentum that these investments are generating for us. Just let me give you two examples of new services.
Last March, I talked about the launch of Aviva Zero, which is a disruptive carbon-conscious proposition in motor. We have now sold over 100,000 policies in the first year and offset over 300 million miles of driving. Today, I'm excited to talk about our new AI-led service, which is powered by Fabric, which helps customers trace and combine their pensions. This is all gonna be available for our workplace and direct customers. Let's move on to growth. Each of our businesses plays a critical role in our portfolio, with Insurance and Wealth leading the way, while our Retirement business continues to play a major role in supporting our cash generation. What's next in growth? In Insurance, our ambition is to achieve above market growth. We will continue expanding our commercial and GCS capability in Canada and in the UK.
We will build on our leading position in UK high net worth. We will leverage Aviva's distribution network to supercharge health SME. In Wealth, we're aiming for at least 10% annual increase in net fund flows. We continue to enhance our Master Trust proposition, which will further our market leadership in workplace. We are now focused on building our direct wealth offering and an integrated wealth proposition which will help us to recapture some of the GBP 6 billion of annual fund outflows. Doug will host an in-focus session which will go into more detail on Wealth in September. In retirement, we're taking advantage of the growing BPA market by enhancing our BPA proposition. We're building a team of advisers that can help support growth in equity release. Now let's turn to efficiency.
Despite the extremely high inflation across our core markets, we have exceeded our original 2022 cost savings target. We are firmly on track to deliver the GBP 750 million of gross cost reduction by the end of 2024. We've simplified customer journeys. We have reduced our property costs. We have streamlined our IT and our product set, all of which generate efficiencies. We have reduced costs at the group center too. All of this points to a new culture of operational efficiency that we are embedding across the group. What's next? We're committed to delivering top quartile efficiency in each of the business lines and realizing more of the benefits of scale. In General Insurance, we've already hit our targets in the UK. Our business in Canada is also, as you can see, very efficient. We are not stopping there.
These are dynamic targets which we will continually reassess. We will deliver more through product simplification and streamlining our commercial lines operations in Canada. In the Life business, Doug has already done a great job of managing the cost base. We're focusing on really transforming the operations to make things simpler, reducing the number of platforms, and consolidating our outsourcing partners. On Aviva Investors, we've secured GBP 50 million worth of cost savings in 2022. Through the operating model transformation and middle and back office outsourcing, which leaves the business leaner and more focused on the customer. We will see the impact of all of these actions flow through to the efficiency ratios as the macroeconomic environment normalizes. Finally, let's turn to sustainability. We continue to lead the pack on climate action, working towards our ambition to become a Net Zero Company by 2040.
We are now ranked fifth amongst global insurers by Sustainalytics. I'm proud of how much we've done here, including donating GBP 38 million to restore Britain's lost temperate rainforests. This is part of a broader GBP 100 million program to help address climate change through support for biodiversity, which has been incredibly well received by customers. What's next for sustainability? This year, one of our biggest pushes is on social action. We're stepping up our ambition with our communities regeneration program, injecting GBP 25 billion into the U.K. economy over the next 10 years. We will continue to use 2% of our profits in supporting our communities every year. To conclude today's presentation, you've heard we've had an excellent year. We've delivered strong and resilient financial performance quarter by quarter, and importantly, we have grown.
Our plan is working. The combination of Insurance, Wealth, and Retirement brings clear benefits, as is evidenced by the numbers that we have reported here today. We have leading positions in our core segments, we have high performing businesses, and we have a formidable brand. We have the right strategy, which is unlocking the unique advantages of our model across the customer, diversification, and scale. We have full confidence in our medium-term targets. We are generating an attractive and growing cash dividend, and we are aiming for regular and sustainable capital returns alongside this. We have delivered, and we will continue to deliver. We are far from believing that we have achieved what needs to be done. We know that there is so much more to go after to satisfy our big ambitions. We are always restless for more.
We have the strategy, we have the leadership, we have engaged and committed people, and now we have these results to show that we can and we will deliver on Aviva's promise. Thank you for listening. I'm now gonna ask Charlotte to join me on the stage. We will open up for questions. If you can put your hand up if you have a question, then please say your name and your institution before you ask your question. Just give us a minute to get ourselves on the seats and our glasses on. Thank you very much. Right. Okay. Where, where can I go first? Right. I am going to go to Alan, please.
Cool. Thanks. This is Alan Devlin from Goldman Sachs. Maybe three questions. First of all, could you talk about your appetite India in the BPA markets? One of your competitors yesterday was talking about a number of large deals in the market if the pricing was right and the margins are right. Obviously, you do have the capital. Would you consider those large kind of one-off type transactions? Then a second similar question on just capital allocation overall. How do you think about when you do allocate capital between the different, you know, Life and non-life divisions, organic versus inorganic growth versus buy back? Is it the same kinda threshold, you know, regardless of where you're allocating the capital?
Thirdly, just actually right at the end, you talked about the social action, which is always quite interesting, should be commended. Could you kind of talk more about what you mean by the social action and the kinda things you're doing? 'Cause I think it is a, it's a very good thing to do. Thanks.
Yeah. Thank you very much. Okay. On BPA, let's start there. Obviously, it's been a big topic. I guess, you'll have seen that we delivered a really strong margin performance in 2022. Clearly, we believe that there is a strong outlook as we look forward for 2023 and beyond. We are not constrained in terms of the size of deal that we choose to do, but we will, and Doug and the team and Dave is here also, will maintain our discipline on pricing for those deals, and we will look at, you know, we will look to those deals as they come into the market. You'll remember when we did the deep dive, I think it was back in...
It seems like a long time ago now, was it June last year that we did it? We talked about our ambition to write between GBP 15 billion-GBP 20 billion of BPA business over the three years. We still maintain that ambition. You know, clearly the team are sort of geared up and ready to go, and the pipeline looks strong. They've had a strong start to 2023. On capital allocation. You know, I think that we clearly think very, very carefully about this. We thought about, we've always said that there are three uses for capital. The first is that, you know, we will invest in the business.
What you've seen here today is, I believe, us delivering on that investment, whether in growth, you've seen that coming through in the growth initiatives, on the cost, you've seen the cost coming out, and also on where we've thought it was the right thing to do on bolt-on M&A. That, you know, that's the first thing. The second thing is around that M&A opportunity we will invest, but only where we really feel that it is something that will add substantively to the business and give us a skill or a capability that we do not have today. Then we have always said that we will not hold on to capital. I think that what you've really seen from today is that we are delivering on that.
We believe that the right way to do this, and we use our words, of course, very carefully, is regular and sustainable. You know, that is what you've seen today. You know what the cash generation of the business is. The Cash Remittances are GBP 1.8 billion. The Net Cash Remittances are GBP 1.3 billion by the time we take off the group. The Dividend Cost is GBP 870 million. What we're doing is returning the operating, you know, the capital that we're generating from the operation of the business, not the excess capital which is being driven through the market volatility. We will maintain for the time being that discipline.
On social action, we're really excited about this because we believe there is a real opportunity that we can play in the communities in which we operate. Clearly there is the infrastructure investment that we can make in local communities outside of the usual sort of Southeast, and we believe that Solvency II reforms will really help us to do that with the different treatments of capital. Also, the work that we've done with the Citizens Advice and the Money Advice Trust means that we have been able to significantly improve the number of advisors that the Citizens Advice have been able to help over the last few months, and we will continue to do that.
We've also been able to help in the contribution towards their website, which means that a lot of people can actually be helped digitally. We're also helping SMEs as well, so it's not just customers in the local community. Clearly, we're also, you know, working really hard with all the communities in which we're operating in. We've recently set up a foundry in Norwich where we've got our own people who are retraining to do different roles, but we're also working with the local schools and the local colleges to retrain individuals from maybe contact center roles into the more digital and data skills of the future. I could go on for a very long time on that, Alan, but perhaps the, there are a few more questions.
Hopefully, that's enough to give you a bit of a flavor for what's going on. We won't let you get away with it next time, Charlotte.
No.
There's definitely gonna be a question for you. Okay, who's next? Ashik.
Yeah. Thank you. Good morning. Ashik Musaddi from Morgan Stanley. Just a couple of questions. Sorry to go back on capital allocation. I mean, you have made it very clear about your priorities with respect to bolt-on deals, investment in the business, et cetera. If I look at your today's update, I mean, you have upgraded the OFG guidance. You are now highlighting that remittances will be higher. What needs to happen in the future that will give us more confidence that, okay, the dividend can grow a bit faster or the buyback could be a bit faster because there still remains a bit of a gap between what you're generating and what you're paying out?
I agree you have announced a buyback, it might be a bit too early to ask this question, still, would be great to know what needs to happen for that to be better. Secondly is, again, on your BPA GBP 15 billion-GBP 20 billion, it's a very clear guidance, definitely. In past you have always commented that diversification is something that matters quite a lot at Aviva. Let's say if a big deal comes out, which is GBP 10 billion, would you still consider it and ignore diversification in any given year, et cetera? Would you still consider focusing on the diversification overall? The reason I'm asking is there is a big focus on big acceleration in BPA volumes for 2023, 2024.
Don't know whether it's right or wrong to go with that, but just want to get some color from you. Thank you.
Okay, thanks. Maybe, Sorry, Charlotte. I'll just pick up both of those.
Yes.
There will definitely be a question for you. There will be.
I'll go and have a coffee.
There will. On the capital allocation and what needs to happen next, look, I think that what we've shown today, Ashik, is a, you know, very strong delivery in terms of the dividend. We gave the number last year in terms of what we would deliver, and we've delivered on that. We've also upgraded the dividend guidance to say that it's low to mid single digit. I really struggle with this on cash cost. A GBP 300 million buyback. I think that that is a considerable, you know, if you like, what was the word? Recipe of... That's a good return.
I think for our shareholders, I think it shows us being disciplined, thoughtful about the way that we are allocating our capital. We will continue to be disciplined and thoughtful, particularly when we think about the environment in which we are operating. It will obviously be constantly something that we will be thinking of. On BPA, The big deal, which is I think similar question to that which was asked earlier. We're not limited by the size of scheme that we can transact. We will clearly look at every scheme on its own merit.
We are expecting some of those larger schemes to come into the market, bearing in mind, what happened last year, and we look forward to sort of having a look at them. I think, we are in the lucky position of being able to think about where and how we allocate our capital. We are not a one-trick pony. We are not just a BPA player. We also have a very strong Wealth business, a very strong Insurance business, and we will think very carefully about how we allocate our capital across those businesses, because we strongly believe that a diversified business has been the key to these results and will continue to be the results going forward.
If that means that we, you know, we cannot deliver the ambitions that we've set ourselves in some of the other areas of the business, we will clearly think very carefully about that. We are not prohibited in any way from looking at those deals. Pricing, as we've shown, discipline is really important. Thank you. Sorry, I don't know your name.
Hi, thank you. Abid Hussain from Panmure Liberum. Just two questions if I can please. Just coming back to Capital and bolt-on M&A. Are there any capabilities that you feel you still need to buy in? I know you've conducted a number of transactions, Succession Wealth most recently. Just wondering if there's anything else that you feel you need to buy in terms of capabilities that meet the criteria, you know, ad scale, et cetera. The second question is on asset sourcing and bulk annuities. I was just wondering, is there anything you think you need to be doing differently to improve your pricing or your margins or both? Just a sort of follow-up, do you think the Solvency II reforms are gonna move the dial enough for you in this context?
Okay. I'll pick up the first question. Charlotte will pick up the second question. On, on capabilities. I think we are pretty well covered in terms of our capabilities. We filled a gap clearly last year with the acquisition of Succession Wealth, which gave us the advice capability. You know, if you remember, we were really keen to address, you know, some of the flows that were leaving the business, and a lot of them were leaving and taking advice before they landed on another platform. With the acquisition of Succession Wealth, that filled quite a big, a capability gap. In General Insurance in the UK, we had a gap in high net worth, and, you know, Adam was able to fill that with the, with the deals that he did there.
It is, it's always an area we're always looking on our radar, as you would expect in terms of what else there might be, but we do actually feel that we have good coverage in those areas that we want to be, to be successful in. On the asset, Charlotte.
On the asset sourcing, and support for the BPAs, you know, this 2022 was a year where we sourced great assets. Actually the mix of illiquids against the BPAs last year was closer to 65%, which is higher than the normal and contributed to the higher margin. You know, that is one of the advantages, the big advantages of Aviva Investors being in-house. You know, they have an excellent real asset and illiquid team that are sourcing. We get those into the warehouse, so we're kind of ahead of when the BPA deals come to market. All of that has improved the margin last year. You know, we moved up more from gilts into corporate bonds last year. That's also helped the margin.
We did that quite opportunistically, you know, looking at market spreads when we executed those. I think all of that and the pipeline for that continuing in 23 is really strong. We also have Aviva Capital Partners, which is another way that we're investing in early stage infrastructure products. I mean, it's early days for that, but we're hoping to have some, you know, things to announce there very soon. I think there's a lot of sources of the high yielding illiquids that can support strong margin for the bulks.
On Solvency II reform, we believe that that is going to be or can be a very positive driver for change, particularly in the infrastructure investment. Obviously, we're very supportive of that and hope that it all passes through quickly. That's what we're keen to do.
Actually, one final point is, you know, that 65 illiquids is probably, you know, at the higher end, we would normally look to be a bit lower than that. You know, actually we hit high margins last year. You shouldn't read that directly across into 2023. The sourcing of illiquids is strong.
Andrew.
Good morning. It's Andrew Crean with Deutsche Bank. Three questions if I can. Firstly, you've got scale businesses in most areas, but in asset management, you're certainly below scale. Have you thought of selling that and outsourcing asset management? Your thoughts on that. Secondly, in both Canada and UK personal lines, what should we expect for 2023? Have you got enough rate coming through the earned premium to counter the rise in burn cost? Or should we expect combines to go up there? Finally, I mean, the 197 solvency ratio is, I think, GBP 1.25 billion above your 180 target range. How should we look at the 180?
Is it the sort of the level you want to be on average across the cycle or is it the level that you are happy to touch down on in dire circumstances?
Thanks, Andrew. I'll pick up one and three and Charlotte can pick up two. On Aviva Investors, I think clearly Aviva Investors is an important part of the group, and yet it's not where it yet needs to be, and I think Mark would recognize that. I think we should really look at what the sort of key things that Aviva Investors brings to the group. Well, firstly, Charlotte has just talked about it. From the annuity business perspective, what Aviva Investors does is bring really high quality assets to allow Doug and the team to be able to price the deals. I think in many respects, Mark isn't getting the credit for the some of that margin which you're seeing in the VNB in BPA.
It is the team really working very closely together to make sure that they're sourcing those sort of high quality illiquids. On the real asset franchise, obviously the future potential for us to play into the new Solvency II reforms is also there. We're pretty excited about that. In wealth, the multi-asset funds for the customers and for workplace pensions are particularly an area that the teams are working together on. I think, you know, the credibility that Aviva Investors gives to the group on ESG, you've seen some of the achievements.
You know, I think they are really punching well above their weight in terms of, in terms of that, and you know, we they're very credible from that perspective. Distribution is being improved, you know, we've seen a strong end to last year. I think 2020, year for Aviva investors was the year of taking out cost. You know, I think, I hope you'll agree, the GBP 50 million of costs out is a significant cost out, and it puts Mark and the team in a really strong position to move forward. It's a very strong, important part of the group. On Canada, Charlotte?
It was UK and Canada, right?
UK, sorry, UK and Canada.
I think on personal lines, you know, we've said it a few times. You know, we think we really got ahead on the inflation. The two big things that are factoring in to the pricing decisions are obviously the continued inflation and the effects of the reInsurance round that we've just done. If I look at what we achieved last year with an inflation across personal lines of between 9% and 11%, we really rated ahead across motor new business, which was about 20 points, and home, which was about 13, whereas, you know, the market was more like 10. Getting ahead of that, you know, that's sort of already beginning to earn through. Then we saw, you know, reasonable retention from those levels.
In Canada, you know, the CPI increased about 7% year on year. We saw repair inflation of about 9.5. We've managed to rate about 12% in personal auto in Ontario and 11% nationally. You know, when it comes to then tackling the reInsurance, you know, that is something we're pushing through now. In Canada, you know, the immediate concern is in the property portfolio, making sure that all the terms and conditions are right, and getting that through as quick as possible. So far, you know, volumes for January and February are holding up with this, pushing this rate through. We need to be sensitive and see how others are playing clearly to keep our market position.
So far, I think we, because we were so early on the inflation and inflation is starting to drop off, you know, making sure now that we tackle the effect of the reInsurance is there. You know, there will be a lag on an earn through basis a little bit because of the renewal round.
On the 180 question, I think, you know, hopefully we were clear that the capital management framework is unchanged, Andrew. We have to reflect the higher interest rate environment. I think we would expect to target the top end of our capital range, which is the 180, whilst that environment is in place. Whilst there continues to be a significant amount of market volatility, you'd expect us to be cautious. The way we think about capital is, you know, the stuff that's actually generated from the performance of the business and then the stuff which is generated through the market conditions. We will treat them slightly differently for the time being.
Just think on that chart, you know, 17 points is coming from the sort of short-term market movements. You know, if you take in that 196, the 17 that came from those during the year.
Okay, thank you. Can I come to you next?
Great. Thanks, Gordon Aitken from RBC. Three questions, please. First on costs. Aviva's obviously the combination of three very big acquisitions a long time ago. 15 years ago, you were running 250 systems roughly. Just wondering how many you're running now and just to give us an idea of the opportunity. Second point on the pension schemes, you touched on those, but can you just tell us who owns the surplus in the pension schemes, if there is one? Is it the company or is it the trustees? Finally, on longevity, you were slightly different to your peers when Solvency II came in. Some of them chose to reinsure some of their pre 16 back book. You didn't. You've got a fair bit of longevity risk in there.
You've guided just this year to GBP 200 million being management actions, and that's been the case for probably five, six, seven years. Pretty much every single year, you're at least double or often triple that number. I'm just wondering, you know, with the CMI model, we've got pretty good transparency on that. We know that COVID deaths are going to be weighted in on a sort of gradual scale up to CMI_2025. I'm just wondering, is the GBP 200 million a conservative number, or is there some other area where you think you might have to add to reserves which is offsetting that? Thank you.
Okay. Thank you. I'll pick up the first one. Charlotte can pick up two and three . On Systems, we do have many systems. I'm not gonna tell you exactly how many there are. What we have done on group costs is we've reduced our IT applications by 22%. The plan is to go much further on that. We're also in the process, as you know, of digitizing our customer journey. We've 57% of those have been digitized to date. The plan is to get to 75% by 2024, we're prioritizing those key customer journeys first. It's not just about systems rationalization, it's also about the number of products that we have on those systems, which make it incredibly complicated for our teams to handle.
We, you know, in personal lines, in Adam's team, we've taken 70% of the personal lines products away. It is, you know, it's about systems, it's about products, and then it's also about trying to drive as much of the journeys that are the most straightforward away from, you know, the telephone to digital. We've been very, very successful in doing that. We've implemented a number of bots into the chatbots into the both GI and Life teams. We've been hearing this week about how they're really successfully taking pressure off the contact center so that the contact centers can really speak to customers about what really matters to them. You know, lots of activity in that space, but further to go.
You heard me talk about the next stage of Doug's development is really looking the number of platforms in the life company, and he will reduce those number of platforms, even further. More to follow. We're really focused on that to simplify the IT estate. Charlotte?
Yeah. The pension schemes are well funded. To the extent there is surplus, it's with the trustees. You know, I think that's the answer to that question. In terms of longevity and management actions, I mean, first of all, let's not forget it's a great underlying result regardless of the levels of management actions. You know, underlying OFG up 15%, underlying profit up 24%, just to remind you. I mean, I think when we look at the longevity outlook, the tables that we view CMI_2021, as you know and said, place no weighting on excess deaths in 2021. You know, there's evidence that population mortality in 2022 was also higher than the pre-COVID levels. When we...
What we will expect to do is suggest CMI_2022 when it comes through in June. We'll consider our own experience as well as population data and how the models that CMI have used are operating and decide how to deal with things. We usually do that in the second half of the year. You know, I don't wanna make any prediction because we need to see all of that. It's likely though that there'll be some reduction in longevity which would have some positive impacts. From our perspective, we run the business for the underlying, therefore keeping that sort of 200 sort of suggested view of normalized management action still is how we look at it.
Okay. Thank you. William?
Hello. Thank you very much. I'm William Hawkins from KBW. Thank you for the detail you've already given us on non-life personal lines. I wondered if you could just go up a higher level and talk about your optimism of whether or of, being able to beat the 94% combined ratio over time. Also interestingly, the components on that, please. 'Cause again, whilst it's great you hit your guidance for this year, the attritional ratio, loss ratio did take a big step up. Interestingly, your commission ratio took a big step down, particularly in UK personal lines, and I'm a bit confused about that. Yeah, how are we feeling about 94% over time, please? Then secondly, Amanda, you've been extremely clear on your capital management framework, so that, that's great.
That's good.
I'm just kind of wondering if you want your buyback to be sustainable, why have you not just rebased the dividend?
Okay. Thank you for that. Charlotte, do you wanna pick up the first one?
Look, I think we never time boxed the 94%. It is something that we're, you know, working towards. I think what we've seen this year, or last year is, you know, really the benefit of the diversification between Canada and the UK. You know, actually a sterling result overall on 94.6% when you think of the inflation and some of the weather particularly here. I mean, I think the point to make is that probably in 2023, we will see a similar pattern where we would expect Canada to be a bit higher than better than the 94% and the UK to still be a bit worse. You know, overall we're sort of tracking towards that 94%.
It is a real ambition. You know, we've also got to factor in all of the different things we've covered. But ahead of inflation, good pricing, and really disciplined risk selection. I think the other thing on the costs, you know, we talked a little bit about being already at the ambition on cost-income ratio terms for the GI businesses. The bar always moves, actually continuing to look at efficiency makes sense and all of that work that we do on claims as well. Very focused, disciplined, taking advantage of the different channels that we have, still keeps 94% in sight.
On the dividend, I mean, hopefully you recognize the upgrade in today's dividend policy. That's because of the confidence that we've got in the outlook for the business. You know, we wanted to obviously address the reducing share count question which we've had at various results sessions. We've given the guidance already for 2023, which is around GBP 915 million. Then obviously we're anticipating low to mid-single digit growth in the CAS cost thereafter. What we want to do is to make sure that the dividend policy is to offer attractive but sustainable dividend, which is resilient through the cycle. We think this is a healthy and sustainable payout of the cash generation from the business.
What we've said, and we've been very honest about this, is that we will return more surplus capital if we can. I think hopefully you'd understand we also want to retain some flexibility here, and we do not want to commit to an unsustainable level of regular dividends. That's why we've made the choice that we have on the capital return and the dividend combination. Thank you. Nasib?
Thanks. Nasib Ahmed from UBS. First question on the internal pension schemes. Again, how close are they to buyout funding? Also given the mark-to-market raise, rise in interest rates, was the pension scheme contribution in Q1 a little bit lower than what you were expecting previously? Second question on General Insurance. On the back book, reserving, are you expecting any inflation loads to come through in 2023? Finally, on the overall cost, save target of GBP 750 million, what is that on a net basis? I think when you said it was GBP 400 million. How much more on a net basis have you got to go, assuming inflation is 10% or whatever you've got in your assumptions? Thanks.
Yeah. Okay. Charlotte, they feel like three questions for you. I'll put my feet up now.
Your turn. Okay. First one on the pension position, your question being whether we're close to buy it. We've, we've done a series of transactions with the pension schemes over a period of time, and we will continue to do that. You know, there has been a, you know, obviously off the back of the September rates have risen, which has helped from a funding perspective. Like many other schemes, we're looking through the liquidity. They're looking through it, whether there's some sort of need to just make sure that liquidity is in good shape before they press on. We'd expect that to continue, maybe over a slightly longer period than we originally anticipated.
You know, it is moving forward and through to that. The second question was on. Sorry, can you just repeat the second question?
It was on General Insurance, sorry.
Inflation in GI.
Inflation in GI.
On the back book.
What was the specifics?
On the back book reserving. Do you expect to take in inflation loads on the reserving in 2023? Are you comfortable with the reserves where they are given where inflation is on the back book?
The reserving process Is very regular. In Q4, for instance, we did another revaluation, and we did strengthen a little bit for inflation on some of the historic claims that are still there. Because we were quite well through, you know, because we got ahead in our pricing, actually the amount that is sort of subject to that is reducing over time as those claims come to conclusion. It's something that we've done regularly, and we did it again in Q4.
On, the cost, the net cost target, it was GBP 400 million, that we said net of the GBP 750 million, and I think we're at GBP 327 million now. Okay. Right. Rhea, you've had your hand up a million times, and I'm sorry I missed you. I should have come to you before.
Thanks, Amanda. Rhea Shah, Deutsche Bank. Three questions from me. I think your interest rate sensitivities in Solvency II have changed from full year 2021 to full year 2022. What was that down to? Was it a change in hedging? Second, one of the slides mentioned a dividend deferral, cash remittance deferral in the UK Life business. How much was that, and when could that be expected to come through? Third, in UK Retail, you mentioned that volumes have held up in January and February so far this year. Does that mean that they've not reduced or have they grown? Would you push for volume growth the rest of this year whilst also maintaining your margins?
Okay. If you wanna pick up the first two, Charlotte, I'll pick up the third one.
The interest, you know, we manage the interest rate risk really around our Solvency II ratio. We try and keep the Solvency II ratio within certain tolerances. It's not fully hedged. We do benefit from some rises in rates, and we do, you know, see some decline in the ratio when they fall. As you say, the disclosure today shows that we are less sensitive than we were before. We've also shown some additional sensitivities to give you 100 basis points. Ultimately, in the higher rate environment, we're less sensitive than we were in the lower rate environment. It's more about where we are in the curve than the specifics of the hedging. That's really the answer there.
You can see for a lot of the market variables, it's sort of reduced by about a third, you know, third to a half. That's that point. You know, and again, the sort of sensitivities have certain simplifications in them. It still depends on which part of the curve moves, and the sort of long-dated nature of some of the Life business also affects that. In simple terms, it's reduced 'cause we're at higher rate environment. The second question was on the Cash Remittances. Yeah. I think you can see in the release that we reduced the UK Life remittances up and accelerated the GI.
I mean, effectively that was a decision we made looking across the group amid the sort of volatility back in following the Mini-Budget. As a precautionary measure of managing liquidity across the group, we looked at the timing of the remittances, and we chose to delay a UK Life one and accelerate the one coming up from GI. I think I would think of that as a timing flexibility that we were able to exercise precautionary. You should expect that that will catch up and normalize sort of across 2023, as we would expect the GI remittance to drop back and the UK Life one to increase.
Just think of it as pure timing. As we looked at the sort of back end of last year, it was flexibility that we had, and we exercised it. Again, another benefit of the diversification of the group. On UK Retail and our approach to volumes, I mean, I think the first thing to say on UK R etail is that as we did last year, we will make sure that we are pricing appropriately for inflation. You know, we were able, therefore, to balance volume, rather than growth, Sorry, profitability rather than growth. We will continue to make sure that we manage that. We are still putting through rate increases in the first few months of this year. We will continue to monitor it.
I mean, you know, if you went to the Personal lines deep dive, you'll know that we are pricing on a hour-by-hour, day-by-day basis in response to the data that we are seeing through. We do not have, you know, an absolute desire to just grow for growth's sake. There is no need for us to do that. We've got plenty of other business lines that we are growing well in. Commercial lines is growing very, very strongly. You know, Adam and the team are very, very carefully watching that, particularly the personal lines market, to make sure that we price appropriately for inflation. What you've seen is our announcement this morning on the Barclays home book, and obviously that gives us, you know, the opportunity to own those customers.
They've been customers of ours for 17 years, but we now own those customers. We're achieving our sort of growth and profitability in perhaps a slightly different way. We're definitely not gonna be driven by top line for Retail. It's all about profitability. We'll be heading towards that 94% combined operating ratio across the piece. Okay, thank you. Is it Dom? Dom. Yeah. Sorry, Dom.
Ta. Dominic O'Mahony, Exane BNP Paribas. Two sort of relatively detailed questions. Charlotte, I think you mentioned there was a positive experience variance in UK retirement. Could you just give us a sense of quantum? I assume this would be in the underlying rather than the management actions, but maybe you could confirm that. Second question, you published the run-off of the surplus generation, the surplus emergence over time, and the total has gone up, which is great and exhibits the growth. There's a bit of a tilt, so it seems to be more back-end loaded, and the front-end has declined a little bit. I was wondering if you could maybe explain that tilt. The third question is on the GBP 1.5 billion OFG target, which...
Thank you very much for the clarity on the ex-management action target, which I think is extremely helpful. Could you just help us get from the sort of the 1.0 today to the 1.3 ex-management action? I think that's, you know, two more years of double-digit growth, which would be brilliant. I just want to understand what we have to believe to get there, what you see as any risks to getting there. Thank you.
Okay. Do you wanna pick up the first two, Charlotte, and I'll pick up the third one?
Yeah. I might. On the one-offs. Sorry. Sorry. Repeat it slowly. You talk very quickly there.
No problems. First question. The first question was, you mentioned a positive experience variance in retirement. Just wondering what the size of that was and whether it's underlying or management action. The second is about the surplus emergence over time, which has grown, which is great. The tilt has become a bit more back-end loaded. Just want to understand the drivers of that. The third is how we bridge to the 1.3 underlying OFG. Thanks.
Okay. The favorite variance was around GBP 100 million. When we take the BPAs on, we look at the... You know, all the data comes through, and we build our best estimate of the liabilities that are coming through. We effectively were able, after a period of time, to improve that. That's that one. I mean, I think, you know, just to lift you back a little bit, you know, we... These are lumpy items that come through from time to time. It's a function of the business and the shape of it that you get these.
Again, you know, there are always things like this, so hopefully that's clear and transparent, and you can see the strength of the underlying regardless of these items. On the
It was the back-end loaded surplus emergence. We may need to come back to you on that one, I think.
Right.
Yeah. We'll come back to him if that's okay. On the underlying, the growth of OFG, obviously we were able to deliver a 15% underlying growth in OFG this year, which hopefully you agree is a good result. You know, we can see now the line of sight through the planning, the work that we have done, whether it's in the Wealth business, in the General Insurance business, in Aviva Investors. It's not one specific area which I think is positive. You're going to see general improvement in OFG across, continued across the BPA business, the Wealth business, the health and protection business, and the General Insurance business, right across the piece.
I'm not gonna break it down for you, though, and you wouldn't expect me to do that anyway. We don't publish our plans. I think the answer to your question is on page 19, but we will definitely come back to you. Okay, the lady there. Sorry. Where's your pen?
Thank you for take my questions. Here is Farooq Hanif from JP Morgan. Three questions from me, please. The first question is, you're bullish about exceeding the GBP 5.4 billion of Cash Remittances over 2022 and 2024. What are the drivers behind that? Is there a target level of remittance ratio to your operational capital generation or earnings that you can point to? The second question is: would you be willing to work with asset reInsurance partners to take, like, larger bulk annuity volumes for very large PRT deals? The third question is: how confident you are in getting to the below 75% cost income ratio in your asset manager business? Also, what are the steps that you have to get there?
Thank you.
Okay. Thank you.
Charlotte, do you wanna start?
Yes. Charlotte will do the first, and I'll do the second two.
Yeah. look, Cash Remittances are up 11% this year. They're based very much on the surpluses that are generated by the businesses. You know, we're very careful about making sure that that's real surplus that's coming through. We set that target of 5.4. I think, you know, we have. You know, if you look at that amount, you look at the progression to 5.4, you look at the strength of the Own Funds Generation, you know, we can clearly see just from that underlying performance that we can repeat that and therefore just the maths tells you that 5.4 is very much easily in reach. We think it's totally repeatable.
Talking back to the sort of mix between the businesses and how we treated it in 2022 from a timing perspective, again, should show some of the flexibility that we've got and therefore the confidence that we can have in getting to the 5.4.
On the asset reInsurance, we already do some asset reInsurance in the deals that we do, so we're very familiar with using that mechanism. Clearly, we will look at all options for deals as we do them, but you wouldn't expect us to announce that here in terms of the structure of any of those deals. In terms of the confidence of getting to the 75% cost to income ratio in Aviva Investors, I mean, clearly the market and the way the market has been over the last 12 months makes all of the target, that target particularly difficult.
I think what Mark has done with the cost takeout is actually put the business in the best possible position to be able to get to that 75% over time and as markets improve. You know, I think we are confident that is still our target, and we believe it is the right target to aim for. Even, you know, some of our targets are incredibly ambitious, but that doesn't mean to say that we drop them. We just keep going. Thank you. Okay, here. I think these are perhaps be the last two questions then.
Thanks. It's Andrew Sinclair from Bank of America. Three from me, please. Firstly, just wondered how's your IFRS 17 transition guidance change after a strong year for retirement and the experience and assumption elements in there. Secondly, I was just interested to know a bit more about the Barclays Home acquisition today. Home been a pretty tough part of the market over the last year after the FCA changes. Just interested what's in the book and do you have the opportunity to target new customers as well? Thirdly, just on real estate and the commercial mortgage book, the loan to value reduced a bit, which is great to see, but what are you seeing on the ground? Any marks to be aware of in there?
What is your thoughts for 2023? Thanks.
Okay. I'll take-
Do you want to take one and three, and I'll take two?
IFRS 17 we've published in the, if you've not got to it yet, the IS8 note in the annual report does show that we have narrowed the range on the NAV impact. It's GBP 16.4-GBP 17. I think it was previously GBP 16-GBP 17. We've narrowed that. On top of that, there's a CSM of about GBP 4 billion-GBP 5 billion. We're still sort of in that GBP 21 billion-GBP 22 billion range on the sort of adjusted shareholder. Other than that, you know, no other news. We were just, you know, you'll see good disclosure in the IS8 on where we've got to.
On the Barclays Home book, it's about 350,000 customers. We obviously know it well as we've been the sole underwriter on this book for the last 15 years. Obviously what you would expect here is the dynamic now slightly changes as they become direct Aviva customers, and therefore, the opportunity for us to speak to those customers about other things that we didn't have before will be there. I know Adam and the team are very excited about that. You know, this is the theme of opportunity which I think has been driven by the FCA's pricing practices review last year. That's, you know, we're really, really pleased about that deal. Charlotte?
Yeah. On commercial property, which is, you know, 8% of the portfolio, you know, it's high quality in nature. It's largely fixed duration contracts with sort of limited refinancing risk. Loan to value ratio is around 49%. You know, no balances in arrears. You know, I think we've had a long history of being in commercial real estate. The sort of areas, it's quite a lot of really high quality office property. Very little retail, very little in sort of peripheral areas or rural areas. You know, it's a strong, solid portfolio.
We're on it all the time, and so far, and looking outward, the experience is strong and protected by that level of loan to value ratio.
Okay. I'm afraid we're gonna have to stop it then. I'm very sorry about that. We know that there are other companies reporting this morning. We did make a bit of a commitment that we would finish to allow you to get there. Thank you very much. We are around. If there are any questions, we are happy to take them. We just need to bring this to a close. Thank you very much, everybody. Thanks.