By Iain Withers
LONDON (Reuters) -Aviva hiked its payouts to investors on Thursday, including a pledged 300 million pound ($355 million) share buyback, after navigating a volatile year in its key markets amid pressure from activist investor Cevian to boost returns.
The British insurer and asset manager said it had paid more than 5 billion pounds to investors since 2021, including a final dividend of 20.7 pence per share for 2022.
The wider insurance sector has faced strain over the past year due to claims inflation and the impact of more extreme weather.
But Aviva (LON:AV)'s 2022 earnings topped analyst estimates, boosted by a jump in general insurance premiums.
The FTSE 100 company reported a 35% rise in 2022 operating profit from continuing operations to 2.2 billion pounds, up from 1.6 billion pounds the previous year.
"Aviva now offers one of the strongest levels of total capital return in the sector," JPMorgan (NYSE:JPM) analysts said in a note.
Aviva shares were up 2.4% at 1430 GMT.
Since taking charge three years ago, Aviva CEO Amanda Blanc has raised billions from selling business units across the globe and has sought to more aggressively cut costs.
Activist investor Cevian - which first revealed its stake in the company in 2021 - said the results showed the company had made a "strong start to the next phase", which it said was delivering Aviva's long-term potential.
"Amanda Blanc and the board of Aviva have done an excellent job in restructuring the company," said Niko Pakalen, partner at Cevian Capital.
Aviva made an accounting loss of 1.1 billion pounds, compared to a 2 billion pound profit the previous year, which it blamed on adverse market movements in 2022.
The company's solvency ratio, a key measure of capital strength, came in at 212%, down from 244% the previous year. Following a pension scheme payment and investor payouts, this fell to an estimated 196%, the company said.
The company's general insurance gross written premiums increased 8% to 9.7 billion pounds, while its fund arm Aviva Investors reported external net flows of 1.3 billion pounds, down from 3.3 billion the prior year.
($1 = 0.8440 pounds)