Aviva pledges to return €4.7bn to shareholders but activist wants more

Aviva pledges to return €4.7bn to shareholders but activist wants more

Aviva has raised £7.5bn from selling eight businesses across the globe since the appointment of Amanda Blanc as chief executive in July 2020.

Insurer Aviva has pledged to return at least £4bn (€4.7bn) to shareholders, sending its shares surging, but activist investor Cevian Capital has demanded more.

Cevian, which revealed in June it had built up a near 5% stake in the Ftse-100 company, promptly reiterated that Aviva should return £5bn of excess capital by the end of 2022. 

"The at least £4bn excess capital return...is a good start, but...would not be enough to address the overcapitalisation and we expect the company to return £5bn by the end of next year," Cevian partner Niko Pakalén said.

Aviva has raised £7.5bn from selling eight businesses across the globe since the appointment of Amanda Blanc as chief executive in July 2020. The life and general insurer, which has its main businesses in Britain, Ireland, and Canada, had previously promised a "substantial" capital return. The shares rose 4%.

Aviva said it intended to return the capital by the end of the first half of 2022, starting with an immediate £750m share buyback. Aviva said it was on track to achieve a targeted £300m in cost savings in 2022. 

Cevian has called for at least £500m in cost savings by 2023.

Aviva reported a 17% rise in first-half operating profit from continuing operations to £725m. The insurer said it would pay an interim dividend of 7.35 pence per share. 

Reuters

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