Aviva says capital return, cost savings plans on track

Insurance company Aviva’s headquarters in London.

Jason Alden | Bloomberg via Getty Images

British insurer Aviva said on Thursday it was on track to return at least 4 billion pounds ($5.41 billion) to shareholders and meet or beat cost saving targets, as it faces pressure to boost returns from activist investor Cevian.

Cevian took a 5% stake in Aviva this year and wants the insurer to return 5 billion pounds in capital to shareholders by the end of 2022, following a recent spate of international disposals.

Aviva in August said it would return 4 billion pounds to shareholders, a figure which Cevian said was insufficient. 

Aviva said on Thursday it had completed 450 million pounds of a 750 million pound share buyback and was on course to achieve a savings target of 300 million pounds in 2022, relative to a 2018 baseline.

Cevian has also said it saw scope for further cost-cutting by the insurer, totalling at least 500 million pounds by 2023.

“We expect the good trading momentum to continue in the fourth quarter, and we remain on track to meet or exceed our cash and cost saving targets,” chief executive Amanda Blanc said in a statement.

Net flows into Aviva’s savings and retirement business rose a record 21% in the first nine months of the year, and general insurance premiums rose 5%, it said. 

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