Aviva boss shrugs off takeover speculation
THE chief executive of Aviva has shrugged off claims that the insurance group is undervalued and at risk of becoming a foreign takeover target.
Dame Amanda Blanc challenged takeover speculation after highlighting the company’s “significant improvement” since she took the helm over three years ago.
She said: “The best defence of any organisation is to have a strong performance. And that is what you have seen from Aviva this morning. So am I worried about it? No, I am not.”
Her bullish comments follow reports of foreign suitors showing interest in the London-listed group, which continues to trade at a discount compared to rivals.
Aviva is reportedly in the sights of Italian insurer Generali, which has drawn up a list of potential takeover targets.
However, there has yet to be any formal talks between the parties, as reported by Bloomberg earlier this week.
Dame Amanda, who became Aviva’s first female chief executive in 2020, yesterday described this takeover speculation as “largely market chatter”.
It follows last year’s reports that Allianz, Intact Financial and Tyrg were interested in acquiring Aviva, which sparked a surge in the company’s share price.
JP Morgan analysts later said these reports were unsurprising given how “inexpensive” Aviva was, despite providing high returns for investors.
Aviva’s profits increased 9pc to £1.47bn in 2023, according to an update released yesterday.
Dame Amanda said Aviva will continue to seek out “selective” mergers and acquisitions to fuel growth, which comes after the company earlier this week announced its return to Lloyd’s of London after buying insurance platform Probitas for £242m.
The performance was driven by a 13pc increase in general insurance premiums to £10.89bn, while the investors ploughed a record £6.9bn into the company’s pensions arm last year.
The company’s private health insurance business also increased sales by 41pc, as patients continue to seek alternatives to long NHS waiting lists.
Aviva reduced costs 1pc to £2.7bn as part of efforts to increase efficiency, meeting its target of reducing expenses by £750m one year earlier than planned.
The company – which has its main operations in Britain, Canada and Ireland – has also upgraded its targets to reach £2bn in operating profit by 2026.
Aviva’s decision to return to Lloyd’s for the first time in more than two decades comes as it seeks to gain a foothold in the booming commercial insurance sector, with demand being driven by threats such as climate change and cyber crime.
Following its deal to buy Probitas, Dame Amanda said: “This acquisition is another step in our strategy to invest in Aviva’s future profitable growth. Aviva’s presence in the Lloyd’s market opens up new opportunities to accelerate growth in our capital-light General Insurance business.”
Aviva, then known as Norwich Union, quit Lloyd’s in 2000 after selling Marlborough Underwriting Agency to Warren Buffett’s Berkshire Hathaway.
Dame Amanda received a £6.63m pay package last year, including a base salary, bonus and long-term share awards.
Aviva plans to buy back £300m of shares following the results. Its shares ended the day up 1.6pc.
Meanwhile, rival insurer Admiral’s latest results show that it increased pretax profit 23pc to £442.8m and group revenue 31pc to £4.81bn in 2023.