U.K.’s Aviva Reports 6% Increase in Operating Profit for 2014

By | March 5, 2015

Aviva plc, in the midst of buying Friends Life Group Ltd. for $8.6 billion, increased its shareholder payout for 2014 by 30 percent as the insurer reported higher profit.

The final dividend was lifted to 12.25 pence per share, taking the total payout to 18.1 pence, Aviva said Thursday.

Operating profit climbed 6 percent 2.17 billion pounds ($3.3 billion). That topped the 2.15 billion-pound estimate of 14 analysts provided by the insurer.

“These results show tangible progress with all key metrics moving in the right direction,” Chief Executive Officer Mark Wilson said in the statement. “We have increased our final dividend to reflect the progress made during the year and our improved financial position.”

Britain’s third-largest insurer by market value agreed to buy Friends Life in December and has until the companies annual general meetings on March 26 to convince shareholders. Wilson is planning to cut about 1,500 jobs from the merged group as part of an estimated 225 million pounds in annual savings.

Value of new business, an indication of future profits, increased 15 percent to a record 1 billion pounds, the company said. The value of new business at Aviva’s U.K. life unit, which was hit by government changes to the pension system, was little changed at 473 million pounds for 2014.

Aviva Investors’ assets under management increased 2 percent to 245.9 billion pounds, of which 45.5 billion pounds were from external clients.

Friends Life Group Ltd. also posted full-year results Thursday. The London-based insurer increased pretax operating profit 38 percent to 556 million pounds in 2014, it said in a statement. The value of new business dropped 47 million pounds to 132 million pounds.

Topics Trends Profit Loss

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