Yahoo Finance Aviva on track to return more cash to shareholders as insurance sales rise 5%
Aviva (AV.L) on track to return more cash to shareholders as insurance sales rose 5% in the first quarter of the year, the company said in a trading update on Wednesday.
The firm's Solvency II ratio, a key measure of capital strength, clocked in at 198%. A level of 100% is the absolute minimum which insurers should hold, according to regulators.
Aviva said a total capital return to shareholders of £4.75bn ($5.88bn) will be complete by end the month.
The company is under pressure from activist investor Cevian Capital, which holds 6% of the insurer's shares, to return more money to shareholders. In March Aviva upped its cost savings target to £750m gross of inflation between 2018-24 and lifted targets for cash remittances and own-funds generation.
Aviva said it was on track to meet these targets and stated its dividend guidance of around £870m for 2022 and £915m for 2023 "remains unchanged".
Aviva shares were up 0.96% on Wednesday morning in London.
The firm saw its best first quarter sales in a decade for its general insurance arm, with sales up 5% to over £2bn, driven by strong sales in commercial lines in the UK and Canada. This is despite £70m of costs from storms Dudley, Eunice and Franklin.
Sales in the insurer's life business in the UK and Ireland grew by 2% to £8.4bn.
Aviva's UK customer base rose by over 100,000 in the last year to 15.4 million.
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Amanda Blanc, group chief executive officer, said: “First quarter trading was positive, and our performance shows the clear benefit of Aviva’s business mix across insurance, wealth and retirement. We delivered healthy sales numbers across all our major business lines.
“We remain very well positioned to benefit from the long term growth trends in our markets, and to meet our upgraded financial targets. This is underpinned by our strong capital position which benefits from rising interest rates. Our financial strength and market leadership give us confidence that we can successfully navigate the current uncertain economic conditions.”
