Aviva Share Price Rallied 6.54% on Its Upbeat FY 2023 Results

Aviva plc (LON: AV) ‘s share price rallied 6.54% after the company released its full-year trading results for the year ended 31 December 2023. The company experienced a robust year of profitable expansion, with notable improvements across various financial metrics. 

The British multinational insurance company reported a 9% increase in operating profit, reaching £1,467 million, up from £1,350 million the previous year. 

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A significant growth of 12% in Solvency II operating own funds, totalling £1,729 million, was partly due to a £208 million boost from extending two partnerships in IWR, with a notable 28% rise when excluding management actions and others.

Solvency II operating capital also grew by 8% to £1,455 million, and the return on equity under Solvency II improved to 14.7% from 9.9%.

Cash remittances increased by 3% to £1,892 million, while general insurance premiums jumped 13% to £10,888 million. The Insurance, Wealth & Retirement segment saw a 13% increase in operating value to £1,849 million. 

The company also reported a 1% decrease in baseline controllable costs to £2,734 million, exceeding the impact of inflation and achieving a cost reduction target of £750 million ahead of schedule. Remarkably, the company reversed a previous loss, posting an IFRS profit of £1,106 million.

In addition, the company announced a new share buyback program of £300 million as part of its ongoing capital return strategy, leading to over £9 billion returned to shareholders over three years. The final dividend per share was raised to 22.3 pence, with a total annual dividend of 33.4 pence, an 8% increase.

Trading performance remained strong, with a 16% increase in UK&I general insurance premiums to £6,640 million and a 10% rise in Canada to £4,248 million. Growth was driven by rate discipline and new business in both personal and commercial lines.

Aviva’s Group CEO, Amanda Blanc, said: “We have made significant progress in 2023. Sales are up, costs are down, and operating profit is 9% higher. Our position as the UK’s leading diversified insurer, with major businesses in Canada and Ireland, is clearly delivering. Today, we have raised our total dividend by 8% to 33.4 pence and have now returned more than £9bn in capital and dividends to shareholders over the last three years. We have generated strong organic growth, especially in our capital-light businesses, which make up over half our portfolio.”

Aviva share price. 

The Aviva share price rallied 6.54% to trade at 483.00p from Wednesday’s closing price of 453.35p.