Insurance, this is how Aviva’s accounts are doing after leaving France
Aviva reports a decline in operating profit in the first half of 2021. It also plans to return at least £ 4 billion to investors. Here are numbers and details
British insurance company Aviva reported a drop in operating profit in the first half of 2021, which fell to £ 1.1bn from £ 1.2bn last year.
RETURN OF 4 BILLION TO INVESTORS
The company – which is also involved in asset management – plans to return at least £ 4 billion to investors, drawing on the proceeds from the sale of its non-core businesses. It will proceed immediately with a £ 750 million share buyback ; the balance will be returned to investors by the end of the first half of 2022.
ACTIONS
This morning in London, where it is listed, Aviva's shares were up 3.7 percent.
THE WORDS OF THE CEO AMANDA BLANC
In a statement, CEO Amanda Blanc said Aviva is "delivering on its commitment" to ensure "a substantial return on capital to our shareholders". The company will offer more details on the payout in March next year.
Blanc joined Aviva just over a year ago and reorganized the company's operations focusing on the main markets (UK, Ireland and Canada), selling eight units to various parts of the world. For example, it sold its French division to the local group Aema for 3.2 billion euros: it has to do with the fact that in 2019 France contributed just one-tenth to Aviva's profits.
The company maintained its divisions in China, India and Singapore.
THE PRESSURES OF INVESTORS
Aviva was recently targeted by Swedish investment firm Cevian Capital AB, which announced last June that it owns a 5 percent stake in the company and would be lobbying for more cost cuts and bigger returns to investors.
HOW AVIVA GOES
Since Blanc took over as CEO in July 2020, Aviva's shares have grown by approximately 50 percent. The divestment plan has allowed the company to raise 7.5 billion pounds: money that, Aviva says, will be used to repay debts.
In the first half of 2021, Aviva's investment division reported net inflows of 829 million pounds: in total, the assets managed by the company amount to approximately 260 billion pounds.
As Reuters notes, Aviva's operating profit related to continuing operations was 725 million pounds in the first half of the year, less than the company's forecast (781 million).
Aviva said it had its best half-yearly sales in a decade from its insurance operations.
DIVIDENDS
The company will pay an interim dividend of 7.35 cents per share, less than the forecast of 7.37 cents.
THE EXIT OF AVIVA FROM FRANCE
Aviva sold its French operations for 3.2 billion euros last February. This is the most important sale wanted by the CEO Amanda Blanc as part of the strategy undertaken to rationalize the activities of the British insurer. The sale is a key deal and accounts for more than half of the approximately six billion euros of disposals Aviva is pursuing.
Aviva France was sold to the French mutual society Aema Groupe, recently created by the merger of Aesio and Macif. According to the Aviva group in February, the sale will significantly strengthen capital and liquidity, with an increase in the Solvency II capital surplus of over 900 million euros (800 million pounds) and 22 percentage points of Solvency II cover. ratio. Aviva plans to use some capital and cash to reduce debt, invest for long-term growth and return on excess capital to shareholders.
“The sale of Aviva France – said Amanda Blanc – is a very significant milestone in the realization of our strategy. It is an excellent result for shareholders, customers, employees and distributors: it will increase Aviva's financial strength and reduce volatility ”.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/aviva-assicurazioni-risultati-primo-semestre-2021/ on Thu, 12 Aug 2021 12:39:28 +0000.