Aviva declared another share buyback and dividend hike on Thursday after its annual earnings surpassed guidance.
The insurance giant reported operating profit growth of 9 per cent to £1.47billion last year, slightly above management’s forecasts of £1.45billion.
Trading was bolstered by general insurance premiums increasing by 13 per cent to £10.9billion, following solid performances across the British Isles and Canada.
In the UK, demand for its private health cover skyrocketed as more Britons sought to sidestep record National Health Service waiting lists for routine operations. Aviva said it expects strong demand to continue.
Turnaround: ‘We have transformed the performance of Aviva over the last three years,’ said Amanda Blanc, Aviva’s chief executive (pictured)
Aviva’s workplace business also achieved a record £6.9billion in net flows, while higher interest rates helped the group win 56 bulk purchase annuity deals worth a total of £5.5billion.
At the same time, the company accomplished its £750million cost reduction target a year earlier than expected, partly through downsizing office space amid a significant shift to hybrid working.
As a result, Aviva has announced a further £300million share buyback and bolstered its final dividend to 22.3 pence per share.
This means that the London-listed group has returned more than £9billion in capital and dividends to shareholders since 2021.
Aviva’s huge payouts followed pressure from activist investor Cevian Capital and were heavily funded by the sale of multiple overseas divisions, including those in Poland, Turkey and Singapore.
Cevian sold its Aviva stake last May after concluding the firm had changed from a ‘poorly-performing conglomerate to a focused and well-performing insurance company.’
Amanda Blanc, chief executive of Aviva, said: ‘We have transformed the performance of Aviva over the last three years.
‘We’ve grown quarter-on-quarter, year-on-year, and by operating more efficiently, we are turning that into improvements in profitability.
‘Through our dividend growth and regular share buybacks, we are sustainably delivering superior returns to our investors.’
Aviva’s results come three days after it agreed to acquire underwriting syndicate Probitas for £242million, paving the way for its re-entry to the historic Lloyd’s of London insurance marketplace after over two decades away.
It said the takeover would help enhance growth in its general insurance business, especially its global corporate and specialty arm.
Other recent acquisitions by Aviva include Canadian vehicle replacement insurance provider Optiom and AIG’s UK protection segment, which it bought from Texas-based Corebridge Financial for £460million.
Aviva shares were 2.6 per cent higher at 466.8p just before midday on Thursday, meaning they have climbed by approximately a quarter in the past six months.
