Financial Services

Aviva plans to buy back £300 million of shares

Insurer sees operating profit rise 9%

Aviva said operating profit increased 9 per cent last year. Photograph: Aviva/PA Wire

Laura Benitez
Thu Mar 7 2024 - 09:04

Insurer Aviva said it plans to buy back £300 million of shares following growth in sales and operating profit.

The insurer and asset manager’s operating profit rose 9 per cent to almost £1.5 billion (€2.2 billion) in 2023, according to a statement on Thursday. Aviva declared a final dividend of 22.3 pence a share, bringing total dividends for the year to 33.4 pence, up 8 per cent from the previous year.

“We have made significant progress in 2023,” chief executive Amanda Blanc said in the statement. “Sales are up, costs are down, and operating profit is 9 per cent higher.”

The firm said it has returned more than £9 billion to shareholders via buy-backs and dividends over the past three years. Swedish activist investor Cevian Capital bought an almost 5 per cent stake in the insurer in 2021 with the intention of pressing for bigger cost cuts and shareholder returns. The activist fully exited its stake last year, noting at the time that Aviva had produced strong shareholder returns, including substantial distributions of excess capital.

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As well as returning capital, Aviva has been investing, most recently with its acquisition of insurance platform Probitas for £242 million, marking its return to Lloyd’s of London market for the first time in more than two decades. In an interview with Bloomberg News on Thursday, Blanc said Aviva saw a gap in the market and the acquisition has handed the firm a significant distribution opportunity that it didn’t have before.

“Insurance is an attractive sector”, Blanc said. “There’s always been consolidation in the insurance sector for the last couple of decades and I guess we can expect to see that continue.”

Aviva rose as much as 4.5 per cent in early London trading and was up 4.3 per cent as of 8:28am.

Clients poured a net £8.3 billion into funds in its wealth business, helping to push assets under management in that unit up 15 per cent to £170 billion. – Bloomberg

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