Aviva announces $380 million buyback after 9% profit rise

By Carolyn Cohn

LONDON (Reuters) -Aviva announced a 300 million pound ($382 million) share buyback on Thursday after strong performance in general and health insurance helped the British insurer to a 9% rise in 2023 operating profit, sending its shares higher.

Operating profit came in at 1.47 billion pounds, slightly above analysts' forecasts of 1.43 billion pounds, according to a company-compiled consensus poll.

Insurers have been navigating issues such as a pandemic, elevated inflation and claims costs and higher losses from natural catastrophes by raising prices and excluding riskier business.

Commercial insurer Beazley announced record profits and a $325 million share buyback on Thursday and motor and home insurer Admiral posted a 23% rise in annual pre-tax profit.

Life and general insurer Aviva, which has its main operations in Britain, Canada and Ireland, also said it was upgrading its targets, including a target for operating profit of two billion pounds by 2026.

"Aviva is moving even faster than before," Chief Executive Amanda Blanc said on a media call. "We are exceeding our targets and setting new ones."

The insurer increased its dividend by 8% to 33.4 pence, against a forecast 33.3 pence.

Its shares were up 3.2% at 0810 GMT, making it one of the top performers in the FTSE 100.

KBW analysts described the results as "reassuring", reiterating their "market perform" rating on the stock.

However, fund management unit Aviva Investors saw operating profit drop 16% to 21 million pounds due to "challenging market conditions", according to a company statement.

Blanc said Aviva continued to look for "selective" acquisitions to fill gaps in its portfolio or for capital synergies.

Aviva said earlier this week it would re-enter the Lloyd's of London commercial insurance market after more than 20 years with the 242 million pound acquisition of insurer Probitas.

Blanc said Aviva was not interested in Direct Line, which last week rebuffed a 3.1 billion pound offer from Belgian insurer Ageas.

($1 = 0.7852 pounds)

(Reporting by Carolyn Cohn; editing by Jason Neely, Iain Withers and Emelia Sithole-Matarise)