Insurer Aviva will promote the remainder of its Italian enterprise and repay £ 800 million of debt as a part of efforts to streamline operations and strengthen its steadiness sheet.
In annual outcomes launched on Thursday, it reported internet revenue of £ 2.9bn in 2020, up from £ 2.7bn the yr earlier than. Development was pushed by robust efficiency in its core financial savings and retirement enterprise, in addition to distinctive bulk annuity gross sales, the place an insurer assumes the liabilities of an organization pension plan in return. of a premium.
These are the primary annual outcomes delivered by Chief Govt Officer Amanda Blanc, who took the lead place final July and has since introduced a collection of divestitures meant to focus the corporate on its predominant markets, the UK, Eire and Canada.
Aviva agreed final month to promote its French enterprise to Aéma Groupe for 3.2 billion euros. In November, he introduced that he can be eliminating a stake in Italian life insurance coverage supplier Aviva Vita.
The London-listed firm has introduced that it’s going to offload the rest of its Italian operations for 873 million euros in money, by promoting the life insurance coverage enterprise of Aviva Italy to CNP Assurances in France and its enterprise typically insurance coverage at german allianz. In whole, Aviva will generate € 1.3 billion in money out of Italy.
Blanc stated on Thursday that the tempo of the divestments has been “quicker” than anticipated, including: “Following the completion of the key divestments, we may also be capable of make a considerable return of capital to our shareholders. . “
The group continues to discover choices for its Polish operations and remaining joint ventures, she stated.
“Issues are transferring rapidly,” Citi analysts stated. The financial institution expects divestments and debt discount to pave the way in which for a £ 3 billion share buyback to be introduced throughout Aviva’s 2021 outcomes.
The group’s shares had been up 1.3% by mid-morning in London, with the prospect of extra returns on capital, in opposition to a 1.3% drop within the FTSE 100 index.
The corporate beforehand introduced a brand new dividend coverage in November that promised to pay out almost a 3rd lower than earlier than the pandemic.
The insurer’s Solvency II ratio – a measure of its capital as a proportion of regulatory necessities – was 202% for 2020, in keeping with consensus estimates set by the corporate.
Aviva has beforehand stated it will think about returning extra capital when its Solvency II ratio exceeds 180%, if its steadiness sheet strengthening targets are met.
Its debt ratio – a key measure of its leverage – was 31% in 2020, in opposition to a administration goal of lower than 30%. The debt discount program, together with the takeover bid introduced on Thursday, is predicted to cut back that ratio to 27%.
Administration has additionally set a brand new goal of producing £ 5 billion of money from its core companies over the subsequent three years. In 2020 the determine was £ 1.4 billion.