Aviva eyes 2020 dividend cut, explores Europe, Asia options

Company wants to scale back operations in other regions to focus on Britain, Ireland and Canada

The Aviva logo outisde its offices in Dublin. Photograph: Aidan Crawley

The Aviva logo outisde its offices in Dublin. Photograph: Aidan Crawley

 

Aviva expects to pay a total 2020 dividend that is a third less than before the coronavirus outbreak and is exploring options for its remaining continental European and Asian businesses, the British insurer said on Thursday.

Aviva’s new CEO Amanda Blanc has said the company wants to scale back operations in Europe and Asia to focus on core markets of Britain, Ireland and Canada.

It expects to pay a dividend of 21 pence for the full year and will increase it by the low to mid-single digits.

Aviva did not pay a final dividend for 2019 as a result of the Covid-19 pandemic, bringing its total dividend for last year to 15.5 pence, down from 30 pence paid in 2018.

The proposed total dividend includes a 7 pence interim dividend. Analysts had anticipated a 25-30 per cent cut after Aviva announced its new strategy, to reflect a smaller business going forward.

Italy sale

Aviva said this week it was selling its 80 per cent stake in Italian life insurer Aviva Vita to joint venture partner UBI Banca for €400 million, following the recent sale of the insurer’s Singapore business.

“We’ve made a good start in simplifying the group,” Ms Blanc told Reuters by phone.

Its businesses in France, Poland, the remainder of Italy and joint ventures in Turkey, China and India are among those under review, following the recent sale of a joint venture in Indonesia.

Reuters reported in September that a consortium of German insurer Allianz and private equity-owned Athora Holding was in advanced talks to buy Aviva’s French operations in a deal worth between €2 billion and €3 billion.

But the deal has run up against opposition from regulators, unions and one of the unit’s main distribution partners, industry sources said.

The firm cut its estimate of COVID-19 related claims in its general insurance business to £100 million net of reinsurance from £165 million, as lower claims frequency in the third quarter improved its overall performance. - Reuters