Aviva upgrades earnings targets

Aviva is targeting higher than mid-single digit percentage growth in its operating profit from 2019.

Om a capital markets day presentation for investors in Warsaw, Poland, the insurer announced upgrades to its targets for earnings growth, cash and dividends.

“Over the last four years Aviva’s financial and strategic position has been transformed,” the company said.

“The capital surplus has tripled; the group has been streamlined and Aviva is now focused on markets where it has high quality franchises and is gaining market share.”

Aviva said it is raising its remittance target from £7bn to to £8bn, which will allow it to deploy £3bn of extra cash over 2018 and 2019.

It said the extra cash will be used to repay £900m of debt in 2018 and fund bolt-on acquisitions and provide additional returns to investors.

The company said it is also raising its dividend target to 55-60% of operating earnings per share by 2020. It said this is underpinned by improved earnings quality and cash flows from its businesses which are becoming less capital-intensive.

“We are upgrading our cash flow and growth targets. After a few years of restructuring, our businesses are now high quality and we expect good, sustainable growth from each of them,” said group chief executive Mark Wilson.