Aviva: Costs down, profits up, and a private healthcare boom as Britain gives up on the NHS

Insurance giant Aviva has posted a rise in annual profits as it rewards shareholders with a £300m buyback and upgraded dividend guidance.

Its shares rose 4.1 per cent on Thursday morning.

The FTSE 100 firm reported an operating profit of £1.47bn for 2023, up nine per cent from £1.35bn in 2022. This figure was a slight beat on analysts’ estimates.

General insurance premiums rose 13 per cent to £10.89bn, driven by strong performances in Canada and the UK.

Aviva’s workplace pensions business saw a record £6.9bn of net flows as it won 477 new schemes last year.

The insurance giant’s private health business saw a 41 per cent boom in sales amid strong demand from businesses and individual customers, which senior execs have previously put down to an increased search for alternatives to NHS waiting lists.

The news comes after Aviva announced on Monday that it would head back into Lloyd’s for the first time since 2000 after acquiring carrier Probitas for more than £200m.

The transaction sees Aviva take tenancy rights to Syndicate 1492, giving it a pathway back into the Lloyd’s market, and boosting the one Norwich-HQed business’ global corporate and specialty business.

The firm said on Thursday that it would commence a £300m share buyback immediately, taking the total amount returned to shareholders through buybacks and dividends to more than £9bn over the last three years.

Its final dividend of 22.3p for 2023 was up from 20.7p the previous year, giving a total dividend of 33.4 pence, up from 31.0p in 2022.

Aviva expected to grow the cash cost of the dividend by mid-single digits, which it said showed “our confidence and ambition for Aviva as we look to deliver for all of our stakeholders”.

Chief executive Amanda Blanc – who was City A.M.’s personality of the year last year – said: “We have made significant progress in 2023. Sales are up, costs are down, and operating profit is nine per cent higher. Our position as the UK’s leading diversified insurer, with major businesses in Canada and Ireland, is clearly delivering.”

She added: “Aviva is financially strong. We are trading consistently well. Our prospects have never been better. We have leading businesses in growing markets, a fantastic brand, and we are investing substantially to make service better for our 19m customers.

“All the ingredients are in place to ensure Aviva continues to deliver an outstanding performance for our customers and our shareholders. I’m certain we will.”

Updated with shares