Aviva shares drop as it posts profit rise and hikes dividend

 
Caitlin Morrison
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Aviva shares dropped earlier today

Insurer Aviva today reported growth in profits and hiked its dividend for 2017.

The figures

Operating profit rose two per cent to £3.07bn, up from £3.01bn in 2016, while profit after tax increased to £1.65bn from £859m.

Total group assets under management grew by nine per cent to £490bn from £450bn, and in general insurance, net written premiums rose 11 per cent to £9.4bn, up from £8.2bn in 2016. The general insurance combined ratio deteriorated to 96.6 per cent from 94.2 per cent.

The group hiked its dividend by 18 per cent and paid out 27.4p per share, compared with 23.3p in the previous year.

Why it's interesting

Aviva said in today's results that the "streamlining" of its "geographic perimeter" is complete, and added: "The strength of our franchises is beginning to shine through."

As a result of these changes, growth targets have been upgraded and the firm is now aiming to increase earnings per share by five per cent in 2018.

Although the company reported improved numbers, shares dropped 2.9 per cent in early trades.

What Aviva said

Chief executive Mark Wilson said: "Our largest market, the UK, has gone from strength to strength, growing sales, market share and profit. For Aviva, the UK is a dependable and growing business.

"This year, we expect to deploy £2 billion of excess cash, including £900 million in debt reduction, in excess of £500 million of capital returns to shareholders and about £600 million for bolt-on acquisitions.

"We continue to invest in our businesses and in particular on priorities such as digital to make our products and services easier for our customers.

Aviva is now a simpler, stronger group and we are growing. Our strategy is paying dividends.

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