27th May 2021 10:42
(Alliance News) -Â Aviva PLC on Thursday reported "very good progress" in the first quarter of 2021 as it continued to dangle the prospect of "substantial" shareholder returns once its series of divestments completes.
Net flows in Savings & Retirement were up 31% year-on-year to GBP2.98 billion. Sales grew 23% to GBP6.17 billion.
Elsewhere in Aviva's Life unit, the insurer reported core present value of new business premiums of GBP8.3 billion, steady on a year ago. There were lower volumes of Annuities & Equity Release in a subdued market compared to a "strong start" in 2020, with sales down 52% at GBP1.05 billion.
Core General Insurance gross written premiums rose 4% annually to GBP2.0 billion in the first quarter of 2021.
Aviva has made progress in its debt reduction plans, Chief Executive Amanda Blanc highlighted.
"We made very good progress in the first quarter. We concluded the refocus of our portfolio, selling eight non-core businesses which will generate total cash proceeds of GBP7.5 billion once completed. We have made excellent headway in reducing leverage with debt reduction of GBP1.9 billion in the first half of 2021, and we expect the leverage ratio to be around 26% at the half year," Blanc explained.
Aviva said it expects the proceeds from the eight sold-off businesses by the end of 2021.
Aviva reiterated its promise of a "substantial return of capital" to shareholders following completion of the transactions. It will provide a further update on this later in the year as it progresses completion of the divestments.
Most recently, it earlier in May completed the sale of its entire 40% stake in the Turkish life insurance and pensions joint venture, AvivaSA Emeklilik ve Hayat AS, to Ageas Insurance International NV for GBP122 million.
Richard Hunter, head of markets at interactive investor, commented: "Previous market estimates of a return of GBP3 billion could yet prove to be a touch conservative."
Shares in Aviva rose 2.7% to 410.20 pence in London on Thursday.
By Lucy Heming;Â [email protected]
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