Aviva hands out dividends as inflows rocket to £1.2bn during pandemic
Aviva has maintained its interim dividend during the pandemic, after the company saw strong new business wins in the UK and North America that boosted third-party net fund inflows to £1.2bn.
The figure marks a huge jump from the £500m of inflows in the same period during 2019, despite tough market conditions during the coronavirus crisis.
Chief executive Amanda Blanc announced a new “sustainable and resilient dividend policy”, as Aviva looks to focus on its core markets of the UK, Ireland and Canada.
The group’s board declared a 7p per share interim dividend, which will be paid in January 2021. Aviva said it currently expects to recommend a final 2020 dividend of 14p per share, which is subject to a final decision to be taken in March 2021.
The additions take its full-year dividends to 21p per share — up from 15.5p in 2019.
“This level of dividend is sustainable and resilient in times of stress, and is covered by the capital and cash generated from the core markets of the UK, Ireland and Canada. Future dividends per share are expected to grow by low to mid-single digits over time,” Aviva said in a statement.
Blanc added: “The response of our people to the Covid crisis has been nothing less than phenomenal and I would like to thank them for all they have done for our customers this year. We continue to work at pace to deliver our strategy, support our customers, and unlock value for Aviva shareholders.”
It comes after Aviva on Monday announced it has agreed to sell its entire 80 per cent shareholding in the Italian life insurance joint venture Aviva Vita to its partner UBI Banca for €400m (£355m).
The life insurance provider noted the transaction will increase Aviva’s net asset value by £0.1bn.
The proceeds from the sale will be used to strengthen Aviva’s central liquidity and will be considered as part of Aviva’s broader capital management and debt reduction objectives.
In August, Aviva vowed to reduce its focus on Asia and Europe, after profit in the first six months of 2020 fell 30 per cent.
“Where we cannot meet our strategic objectives, we will be decisive and we will withdraw capital,” Blanc said, adding that Aviva would focus on growth in the UK, Ireland and Canada to deliver “long-term shareholder value”.