Aviva PLC (LSE:AV.) reported on Thursday a bumper dividend and strong growth in profits despite significant market volatility and kicked off a £300mln share buyback.
The FTSE 100-listed insurer posted a 35% increase in operating profit to £2.21bn in the 12 months to 31 December 2022 from £1.63bn a year before, while general insurance gross written premiums (GWR) rose 8% to £9.75bn from £8.81bn with a combined operating ratio (COR) of 94.6% (2021: 92.9%).
Chief executive Amanda Blanc said: "Our core businesses in the UK, Ireland and Canada grew in 2022, and contributed to a very strong, all round performance. Life insurance value of new business is up 15%, general insurance sales are up 8% and overall operating profit is up 35%. We are investing to make it easier for customers to do business with Aviva and customer numbers in the UK have grown to 15.5mln."
Solvency II shareholder cover ratio was 212%, down from 244% in 2021, while solvency II return on equity increased to 16.4% from 10.7%.
The London-based firm paid a final dividend per share of 20.70p (2021: 14.70p), taking the total dividend to 31.00p, up from 22.05p in 2021 as per previous guidance, while it also launched a £300mln share buyback.
Blanc signalled further dividend increases to come. “We are committed to delivering an attractive and sustainable dividend, and have upgraded our dividend guidance to low-to-mid single digit growth in the cash cost of the dividend,” she said.
UK & Ireland General Insurance GWR rose 7% to £5.74bn (2021: £5.35bn), with a COR of 96.1% (2021: 94.3%). UK commercial lines performed strongly with GWP up 12%, while personal lines was up 2%.
Looking ahead, Aviva said in UK & Ireland Life it expects higher bulk purchase annuity volumes in 2023 as a growing number of pension schemes look to de-risk. The firm said its wealth business remains positioned to grow and it continues to expect good demand for Protection and Health products.
In General Insurance, pricing will remain a key focus due to the inflationary environment.