Sunday, December 10, 2023

Aviva chief says UK should ‘stop talking ourselves down’ as companies shun London listings

Aviva’s chief govt Amanda Blanc has known as on UK firms and policymakers to “cease speaking ourselves down” as nervousness grows about an exodus from the London inventory market. 

The choice of teams resembling chipmaker Arm and constructing supplies big CRH to go for listings in New York has fed concern in regards to the decline of the UK’s capital markets. This week, Authorized & Normal boss Sir Nigel Wilson lamented the “perpetual drift” away from the Metropolis. UK policymakers and regulators have additionally shared their considerations a couple of rash of delistings.

“We would like the UK to achieve success and I believe we must always cease speaking ourselves down,” Blanc instructed the Monetary Instances, after the publication of the corporate’s full-year outcomes.

“For me, I do consider we have now quite a lot of the element elements within the UK, and we simply must get out of our personal means and really begin delivering on a few of the stuff that we mentioned we’d do,” she added.

Blanc highlighted the federal government’s deliberate overhaul of insurance coverage solvency guidelines, which the trade hopes will unlock £100bn of funding in UK infrastructure. The UK financial system would profit from “a little bit of confidence”, she added. 

Aviva’s shares rose 3 per cent by lunchtime in London after its full-year working earnings of £2.2bn got here in forward of analyst expectations, pushed by a great efficiency by its UK life enterprise and adjustments in longevity assumptions.

The insurer’s year-end solvency stage additionally beat consensus estimates, clearing the way in which for the corporate to announce a contemporary £300mn share buyback. Aviva additionally improved its future dividend steerage, with it now anticipating low-to-mid single-digit progress within the money price of the dividend after the £915mn that needs to be returned in respect of this yr.

Within the outcomes assertion, Blanc highlighted that this took the full capital return to shareholders to greater than £5bn since 2021. That was the quantity initially pushed for by Cevian, the activist shareholder that took a stake in Aviva that yr, changing into certainly one of its largest shareholders. It has now diminished its stake under 5 per cent. 

Cevian companion Niko Pakalén mentioned Aviva’s administration had carried out a superb job restructuring the corporate and that the day’s bulletins confirmed a “sturdy begin” to the following part of “delivering on Aviva’s full long-term potential”.

One space the corporate is counting on for future progress is the marketplace for company pension offers, the place companies pay to switch their pension liabilities to an insurer. Rising rates of interest have made such offers attainable for a swath of pension schemes.

Aviva did 50 offers for schemes in 2022, price a complete of £4bn, and expects to finish offers price £15bn to £20bn in complete by 2024. However Blanc mentioned the insurer “wouldn’t be ready to enter right into a pricing warfare” as suppliers compete fiercely for enterprise.

Elsewhere, situations in Aviva’s asset administration enterprise are anticipated to stay “difficult” amid uneven markets. However the group’s common insurance coverage enterprise managed to show an underwriting revenue, once more in step with analyst forecasts, regardless of the menace from inflation driving up claims prices.

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