Insurer Aviva PLC (LSE:AV.)'s full-year results were positively received by the market on Thursday, with shares adding 1.5% to a year-to-date high of 461.8p.
Chief executive, Dame Amanda Blanc, used the strong results, which underscored better-than-expected operating profits of £1.47 billion, to tout the insurer’s successes while nixing lingering rumours of international takeover interest.
On Aviva’s acquisition of Lloyd’s of London constituent Probitas, Aviva’s chief executive Blanc said she was “incredibly excited about the deal… We have landed on a deal which just is so complimentary to Aviva, both in terms of the geography and also in terms of the product mix”.
The Probitas acquisition opens up a whole new distribution line for Aviva because many brokers prefer to do business through the syndicate.
“Now is the time for (brokers) to deliver on the promises that they've made to us,” said Blanc. “We've entered into Lloyds and now they can deliver that distribution through those markets.”
She said the response from brokers “has been incredibly positive”.
Blanc also addressed Aviva’s position as a takeover target.
The Times reported that Aviva was in the sights of foreign buyers last October, while previous reports had Germany’s largest insurer, Allianz, Canada’s Intact Financial (TSX:IFC) Corporation and Danish insurer Tryg as interested parties.
Blanc on Thursday called takeover rumours “largely market chatter”, stating: “The best defence of any organisation is to have a strong performance. And that is what you have seen from Aviva this morning. So am I worried about it? No, I am not.”
Aviva’s share price discount before Blanc’s takeover and historically lacklustre shareholder returns made the group a target of activist investor Cevian Capital until Cevian retired its campaign in May 2023.
“Over the last few years, Aviva has transformed from a poorly-performing conglomerate to a focused and well-performing insurance company," Cevian partner Niko Pakalén said at the time.
In conjunction with today’s results, Aviva declared £300 million in share buyback while raising the total dividend by 8% to 33.4p per share with a Solvency II shareholder cover ratio of 207%.
This is likely to keep the wolves at bay for a while longer.