Aviva plans “regular and sustainable” investor payouts, its CEO said on Wednesday, as the British insurer reiterated plans for a share buyback program alongside its 2022 results and posted a rise in nine-month gross written premiums.
Aviva, under pressure from activist investor Cevian Capital to increase returns to shareholders, said the size of the buyback would be decided by the board at year-end.
“Regular and sustainable are important … we would return capital that we generated through the operation of the business as opposed to capital we generated through the market environment,” CEO Amanda Blanc told Reuters by phone.
Jefferies analysts have previously said they expect Aviva to make recurring 250 million pound ($289 million) pay-outs.
Aviva has already returned 4.75 billion pounds to investors after raising 7.5 billion in a string of asset sales since Blanc became CEO in July 2020.
Cevian in the past called on Aviva to return five billion pounds to shareholders by the end of 2022.
Bankers have said Aviva’s fund unit Aviva Investors could be an attractive target for European or North American financial services firms, but Blanc said it was not for sale, pointing to a “symbiotic relationship” between the unit and other parts of Aviva’s business.
Aviva’s solvency ratio, a key measure of capital strength, came in at 223%, above the top end of its target range, despite turmoil in the UK gilt market in late September that caused a liquidity crisis for pension funds. The insurer’s dividend guidance remained unchanged.
Aviva provided a short-term loan to one of its smaller staff pension schemes to help it over the crisis, chief financial officer Charlotte Jones said.
Aviva reported a 10% rise in general insurance gross written premiums in the first nine months of the year to 7.2 billion pounds. The value of new business in its UK and Ireland life division rose 46% over the same period to 466 million pounds.
Aviva’s shares were down 1.4% at 0843 GMT, however, one of the worst performances in the FTSE 100 .FTSE. Barclays analysts pointed to a drop in Aviva’s sales of bulk annuities – insurance for corporate pension schemes.
($1 = 0.8666 pounds)
(Additional reporting by Andres Gonzalez; editing by Sinead Cruise and Mark Potter)
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