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Aviva to sell off Italian operation to pay down debt

Aviva posts net profit of £2.9bn

Aviva confirmed on Thursday that the company is set to sell its Italian arm in 2021 as it looks to pay down its debt.

The insurer will offload its Italian operation by selling for €873m in cash according to its financial statement released today. Aviva expects a £1.7bn debt reduction in the first half of 2021.

The insurer also announced a net profit of £2.9bn, up from £2.7bn in 2019.

Aviva had a record year with strong sales of bulk annuities, in which the company took on a large portion of corporate pension scheme liabilities.

Aviva proposed a final dividend of 14p per share, bringing the total dividend for 2020 up to 21p per share. This is up from 15.5p per share in 2019.

On Thursday’s market opening, Aviva’s share price was up by 0.89% to 386.4p per share. Year-to-date the company’s share price is up by over 20p.

Amanda Blanc, chief executive at Aviva, commented on the results:

“2020 was a year of significant change for Aviva. We have taken major steps forward in simplifying the business, most recently with the sale of Aviva France and today’s announcement of the sale of the rest of our Italian operations. Our strategic focus is now on the UK, Ireland and Canada where we have leading positions. We are putting customers at the heart of everything we do and I am confident we will transform Aviva’s financial performance and deliver greater value for our shareholders. I recognise we have much more to do and we are getting on with it.”

“Our performance in 2020 demonstrates the resilience of our Core businesses and our growth potential. We delivered record sales in group protection; record sales of bulk purchase annuities; and record net flows in savings and retirement, where we are the largest provider of workplace pensions in the UK.”  

“Aviva is financially strong and following the completion of the major disposals, we will be in a position to make a substantial return of capital to our shareholders. We are also announcing today an £800m debt tender offer. This allows us to accelerate our debt reduction plans and lower debt by a total of £1.7bn in the first half of this year.”

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