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Aviva PLC on Thursday hailed its shift towards higher returning capital-light areas, as it raised the dividend and reiterated medium term guidance in strong 2024 results. Pretax profit fell 25% £1.27 billion in 2024 from £1.69 billion a year prior. Operating profit climbed 20%, however, to £1.77 billion from £1.47 billion, and ahead of the £1.67 billion consensus. Insurance revenue increased 12% to £20.75 billion from £18.50 billion. Underlying Solvency II own funds generation rose 18% to £1.50 billion from £1.28 billion. Underlying Solvency II operating capital generation improved 17% to £1.24 billion from £1.06 billion. The Solvency II return on equity eased to 13.6% from 14.7%. Insurance, Wealth & Retirement sales rose 22% to £43.5 billion from £35.5 billion while General Insurance premiums rose 14% to £12.20 billion from £10.89 billion. The firm raised the final dividend 6.7% to 23.8 pence from 22.3p, taking the total dividend to 35.7p, up 6.9% from 33.4p. Aviva said it is accelerating a shift towards higher returning capital-light areas, with 56% of the group‘s 2024 operating profit from capital-light businesses. The proposed acquisition of Direct Line will add further capital-light operating profits with around 10% run-rate earnings per share accretion, Aviva said. Aviva said the £3.7 billion takeover of car and home insurer Direct Line Insurance is progressing in line with expectations with completion anticipated in mid-2025. Chief Executive Amanda Blanc said: ‘2024 was an excellent year, right across Aviva. We made clear strategic progress and delivered another set of very good numbers, with higher sales, higher operating profit and a higher dividend. ‘The proposed acquisition of Direct Line is on track and is a clear opportunity to accelerate our capital-light growth, deliver brilliant service to millions more customers, and support the wider development of the UK economy. ‘Aviva is in great shape. We have clear trading momentum which is generating strong and reliable growth,’ she noted, adding there is so much ‘untapped potential for Aviva to go after and I have real confidence in our ability to unlock this.’ Looking ahead, Aviva said it remains confident in meeting the group standalone targets for operating profit of £2 billion by 2026, Solvency II OFG of £1.8 billion by 2026 and cash remittances of more than £5.8 billion cumulative 2024 to 2026. Shares in Aviva rose 2.5% to 537.80 pence in London on Thursday morning. The wider FTSE 100 was up 0.3%. Copyright 2024 Alliance News Ltd. All Rights Reserved.
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