Aviva has announced an interim dividend of 7p per share and a new payout policy which will see it pay out nearly a third less than it did before the coronavirus crisis hit.
In its third quarter update, published this morning (November 26), Aviva predicted it would pay a final dividend of 14p a share for 2020 taking the total payout to 21p, with a rise of low to mid-single digits after that.
Aviva paid a dividend of 30p per share for 2018.
This fell to 15.5p a share for 2019 after the insurer scrapped its final dividend in the early months of the the pandemic. This was after the Bank of England wrote to banks and insurers suggesting they should conserve cash early in the coronavirus crisis.
Aviva said its latest dividend and new policy was “sustainable and resilient resilient in times of stress, and was covered by the capital and cash generated from the core markets of the UK, Ireland and Canada”.
UK & Ireland Life new business sales were up 40 per cent to £9.2bn in the first nine months of the year, compared with £6.6bn the previous year.
Aviva’s UK Savings and Retirement business saw net fund flows increase by 20 per cent to reach £6bn, with both workplace and retail platforms continuing to show positive trends.
In addition Aviva investors saw third party net fund inflows of £1.2bn, up from £500m the previous year, which was due to new business wins across the UK and North America.
Under new chief executive Amanda Blanc, who took over in July, Aviva has been working to focus on its UK, Irish and Canadian markets, where its businesses are big enough, after profits fell on the back of Covid-19.
The provider said for the first nine months of the year, the value of new business fell to £714m from £828m a year earlier.
Earlier this week (November 23), Aviva announced it would sell one of its Italian businesses for €400m (£357m).
This comes after it sold is Singapore business in September for £1.6bn
Ms Blanc said the business was “making good progress” in its strategy to simplify its portfolio.
She added: “The first nine months have demonstrated Aviva’s ability to grow in core markets where we have attractive, long-term growth prospects.”
amy.austin@ft.com
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