Aviva to return £4.75bn to investors as FY profits fall

UK insurer Aviva on Wednesday said it would will return £4.75bn to shareholders, as adjusted annual operating profit fell 10% and it bought a wealth management firm for £385m.

Adjusted operating profit from continuing operations for 2021 was £1.63bn, after a softer performance in Aviva’s UK life business. Group operating profit for 2021 came in at £2.26bn, compared with £3.16bn a year earlier, reflecting the offloading of eight non-core businesses last year.

The total dividend was 22.05p a share, up from 21p with a 40% increase in 2022 dividend to around 31.5p forecast.

Aviva had pledged previously that it would hand out at least £4bn from disposals to investors but had come under pressure from activist investor Cevian, which was looking for £5bn. The return includes an existing £1bn share buyback scheme.

It also announced the acquisition of Succession Wealth, saying the deal “significantly” enhanced its presence in the fast-growing UK wealth market as more people seek advice for their retirement and savings options.

Cost savings of £750m were targeted for the 2018-24 period.

Chief executive Amanda Blanc said 2021 had been a year of “significant strategic process” for the firm despite the drag on profits.

“We successfully completed the sale of eight non-core businesses, generating excellent value for our shareholders. Our financial position is strengthened and Aviva is now a much simpler, leaner business, focused on our core markets in the UK, Ireland and Canada,” she said.