Aviva boosts shareholder returns, buys Succession Wealth

[LONDON] Aviva said it will return £4.75 billion (S$8.6 billion) to shareholders, and will invest half a billion pounds in growth and efficiency efforts in the coming year as it enters the next stage of its overhaul.

The UK-based insurer and asset manager also said it had acquired financial advice firm Succession Wealth for £385 million as it reported full-year results on Wednesday. The results showed group adjusted operating profit of £2.27 billion, slightly below a Bloomberg-compiled analyst consensus of £2.33 billion.

Aviva previously said that it was planning to return at least £4 billion to investors from the sale of some of its non-core assets.

The results are a milestone for the revamp launched by chief executive office Amanda Blanc after she took the reins in July 2020. Blanc refocused the firm on the UK, Ireland and Canada and sold off eight units in other markets.

The shares rose 1.1 per cent at 8:14 am in London.

"Our financial position is strengthened and Aviva is now a much simpler, leaner business, focused on our core markets in the UK, Ireland and Canada," Blanc said, noting each of Aviva's 22,000 employees would each receive £1,000 of shares.

The firm also updated its dividend policy, estimating it would pay a dividend of about £870 millions in 2022, up around 40 per cent from 2021. That would rise to £915 million in 2023 with "low-to-mid single digit growth" thereafter, the company said.

The insurer is also moving to a new London headquarters as it downsizes its property footprint as the firm embraces flexible working, Blanc said on a call with journalists. Aviva is in the process of exiting the small amount of Russian investments it holds.

"We have a very, very minimal exposure to Russia via our Aviva Investors business and we will be divesting of that exposure as soon as we practically can," Blanc said.

The firm said it would also pay investors a total dividend of 22.05 pence per share in 2021, up 5 per cent from the previous year. It will investment £200 million between 2022 and 2023 in cost reduction, and £300 million for growth over 2022 and 2024.

Sweden-based Cevian Capital, which revealed in June it owned an around 5 per cent stake in the company, said that it wanted Aviva to return £5 billion by the end of the year. BLOOMBERG