Aviva confirms plans to hand back £4bn to shareholders
12 August 2021, 13:14
The insurance giant will use the proceeds from the sale of eight global divisions, as part of an overhaul, to enrich investors.
Insurance giant Aviva has confirmed it will hand back at least £4 billion to shareholders over the next year.
The cash will come from the sales of eight units globally part of a massive downsizing effort by the firm to focus on its core regions of the UK, Ireland and Canada.
A first tranche of the money, £750 million, will be spent on a share buyback scheme to start immediately, which led to the share price jumping more than 4.3% by lunchtime on Thursday.
The announcement came as the business revealed adjusted operating profits hit £725 million, up 17%, in the first six months of the year compared with the same period a year earlier.
Bosses also said sales figures in the first six months for its UK general insurance division were the highest in a decade.
This was down to more customers topping up pension pots and saving cash accumulated during the Covid-19 crisis.
Retirees and high income households made the biggest savings during the pandemic as large swathes of the economy where they spend their money remained closed.
In the Savings and Retirement division, net flows increased 24% to £5.2 billion, including 100,000 new workplace customers.
And the lockdown measures also helped the company’s motoring division, with fewer vehicles on the roads leading to less insurance claims being made, although this was offset by lower prices charged by Aviva for policies.
On the cash returns to investors, chief executive Amanda Blanc said: “We intend to return at least £4 billion to investors by the end of the first half of 2022, starting with a share buyback of up to £750 million.”
She added: “While we’ve got more to do, our half year results show we have what it takes to drive growth in our businesses.
“We remain completely focused on transforming performance, capitalising on the breadth of Aviva, making insurance simple and easy for our customers, and creating value for our shareholders.”
The boss also revealed the interim dividend to shareholders would rise 5% to 7.35p a share.
