- Profit at both firms tops forecasts
- Aviva announces £300 million buyback
- Beazley plans $325 million buyback
Shares in FTSE 100 insurance groups Aviva (AV.) and Beazley (BEZ) were among the gainers after both firms posted positive results and announced plans to buy back their shares.
Aviva shares climbed 4% to 473p while Beazley shares added 2.5% to 670p.
AVIVA ON SOLID GROUND
Aviva reported full-year earnings which beat expectations with operating profit up 9% to £1.47 billion against the firm’s prior guidance of a 5% to 7% increase.
The beat looks to have been driven by the GI (general insurance) business where premiums rose 13% and the investment return was better than expected.
The firm also reported record net flows of £6.9 billion into its workplace pensions business after winning 477 new schemes last year, and it took on £5.5 billion of bulk annuities at strong margins.
‘We have made significant progress in 2023’, said chief executive Amanda Blanc. ‘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.’
‘We are building a clear track record of strong and consistent performance. In each of the last three years we have grown sales, operating profit and our dividend. This momentum gives us increased confidence for Aviva's future’, added Blanc.
This confidence was reflected in an increase in its dividend policy and a £300 million buyback, despite a number of recent acquisitions including AIG’s UK protection business and Probitas, a Lloyds of London insurer.
BEAZLEY PROFIT AHEAD OF SCHEDULE
For the year to December, Beazley delivered record profit of $1.25 billion against $584 million in 2022 thanks to a near-25% increase in net written premiums to $4.7 billion and better-than-expected net investment income of $480 million.
Return on equity jumped from 19% to 30%, and the firm joined the growing list of FTSE 100 companies buying back shares with a $325 million repurchase programme, slightly better than it had guided.
James Pearse at Jefferies noted Beazley had hit his target of $1 billion of net earnings a year earlier than forecast, while its combined ratio last year and its guidance for this year was in line with market expectations.
