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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Aviva Plc | AV. | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
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|---|---|---|---|---|
| 4.80 | 0.88% | 552.40 | 10:12:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 548.60 | 547.40 | 552.60 | 547.60 |
| Industry Sector |
|---|
| LIFE INSURANCE |
| Top Posts |
|---|
Posted at 15/3/2025 10:45 by masurenguy AvivaInvestors’ Chronicle Aviva’s full-year adjusted operating profit, general insurance premiums and wealth division have grown, while it has also had its highest year of bulk-purchase annuity sales. The shares have risen 14% since January, and it has increased the full-year dividend 7%. Aviva’s £2.7bn acquisition of rival Direct Line will help it shift more towards motor and home insurance and away from the capital-intensive life insurance business; “we like the logic of the deal and the outlook for shareholders’ returns”. Buy (536p). |
Posted at 07/3/2025 07:57 by pete160 Aj, presumably you're here as an investor in aviva?You were able to choose whether or not to do that. However, what you're advocating is that choice be removed and delegated to some politician. I don't invest in ethical funds, but if I wished to, I would want the choice to do so. Before firing off indignant emails to ceo's (which they never see in any case) perhaps research the facts behind the article first? |
Posted at 26/2/2025 11:26 by tourist2020 From FT Advisor yesterday. Good to see they are trying to leverage scale. Sorry if its a bit long!Creating a single global bonds team where people are encouraged to “talk to each other” is central to Fraser Lundie’s plans to grow the fixed income business at Aviva Investors. Article continues after advert The company manages about £100bn of fixed income assets, but Lundie told FT Adviser that a “huge” proportion of this is internal money, for example cash it invests on behalf of parent company Aviva. Lundie joined Aviva Investors as global head of fixed income in November 2024, with a remit to increase the assets managed by the company on behalf of financial advisers and other external investors. He said: “Aviva didn’t have a dedicated fixed income group when I arrived. “The ability of the different fund managers to talk to each other was limited, so I have reorganised teams. The aim is to increase the ability of people to talk to each other, regardless of where they are in the world, and to have the most informed people on each topic in the room together discussing it. “What was there before felt more like a number of boutiques, with different teams working on their own products.” This has led Lundie to create a series of what he calls “pods”, where people are organised less by the geographical region they work in, or type of fund they run, and more by the topic area. He said: “So people whose specialism is understanding duration’s impact on fixed income markets are part of the duration and curve pod. “Then there is a pod for credit, and one for emerging markets and short-term opportunities. “So, for example, [recently] we had a meeting with the duration and curve pod and that involved all of those specialists, from the UK and North America, sharing their views on the topic of duration with all the insights available to everyone.” Despite his determination to grow the fixed income business, Lundie does not want to launch any new funds, as he feels the company already has the full product range necessary. One hire he has made is that of Gita Bal, who has joined the company as head of fixed income research, a role which involves working across all of the pods and co-ordinating the research carried out within them. At the moment he feels the hurdle to own bonds with a higher level of credit risk is quite high, particularly in areas such as asset backed securities, because lower risk assets have quite high yields right now. A curiosity in fixed income markets in recent years has been the persistent tightness of high yield bond spreads. This is the extra yield one gets from owning bonds with a lower credit rating, which is low relative to owning government bonds. Many market participants expected 2024 to be a year where the spreads widened. Investors expected a slower growth environment in the US, and recession in other parts of the world, to lead to an increased desire from investors to own assets that were lower risk. But that did not play out in 2024, as investors persevered with high yield, prices remained stable and spreads remained tight. Lundie said he believes this is because buying investments for yields is the priority for a large number of investors. There are market participants focused on the yield, and on owning the bonds to maturity rather than selling prior to then, meaning the potential for a paper loss is much reduced. He said that in the past many bond market professionals thought that those buying primarily for yield were “unsophisticat david.thorpe@ft.com |
Posted at 21/2/2025 13:48 by muscletrade Not exactly hot off the press but still worth a quick read..Aviva PLC (LSE:AV.) may shock investors next week when it releases results for 2024, that’s the view from analysts at UBS. The Swiss bank’s team has previewed the upcoming results due next Thursday, 27 February, warning there’s “potential for negative surprises”. Nevertheless, the analysts also see the UK’s leading life insurer as the ‘preferred pick’ in the sector. “We see potential for negative surprises at Aviva at FY24 results, mainly driven by the life insurance business, where we remain below consensus expectations,” UBS said in a note. “However, we see potential upside from the general insurance business, where Intact reported decent results for its Canadian business, which could result in c.£30mln upside to our estimates. “We also see positioning as a risk, as Aviva remains one of the most crowded stocks within our UK life insurance coverage.” UBS noted that Aviva itself indicated an operating profit of £1.85 billion, which would be beneath current market consensus estimates, and, would represent some ‘7% downside risk’, albeit, the analyst team reckon this inhouse projection is conservative. The Swiss Bank forecasts £2 billion of operating profit for Aviva, excluding the Direct Line business. Looking further ahead, UBS sees the integration and ‘synergiesR “Aviva remains our preferred UK life insurance pick, followed by L&G over the long-term,” the UBS analysts added. “We see significant EPS and DPS upside from the Direct Line deal. The deal is expected to close by mid-2025, and we expect an update from management around FY25 results.” |
Posted at 31/1/2025 18:32 by xtrmntr It's been more than four decades since TV audiences were first introduced to Knight Rider, its leather-clad star David Hasselhoff, and his sidekick: a haughty, self-driving Pontiac called KITT.This means 40-odd years in which autonomous vehicles' (AVs) potential has loomed large in our imaginations. Clearly, the future is yet to arrive. But unlike nuclear fusion, cryonics, and teleportation, the technology has now existed for two decades and could soon be rolled out.Domestically, British Knight Rider fans may finally get a taste of the automated thing from 2026, when the government expects the first AVs on UK roads. The Automated Vehicles Act, which last year passed into law, is intended to aid the technology's deployment, reduce collisions caused by human error, and jump-start an industry "estimated to be worth up to £42bn by 2035". Cue warm words from self-driving start-ups Oxa and Wayve, and the Society of Motor Manufacturers and Traders.The same announcement carried no comment from the UK's leading motor insurers (2024 market value £22bn), though they will be watching closely. If driving is on the cusp of rapid growth and disruption, as AV proponents suggest, then the concept of driver liability could soon be overturned.Right now, however, the UK's motor claims sector is facing a more imminent shake-up. Assuming a recently defanged CMA doesn't derail things, Aviva (AV.) will soon buy Direct Line (DLG), doubling its market exposure to become the industry's biggest player.Both parties have reasons for cheer. By selling at a big premium and hitching itself to a bigger wagon, Direct Line shareholders are no longer all-in on an iffy turnaround strategy. For Aviva, the prize is a more balanced insurance book, and lower relative group-level capital strain, all for a fair price. Then there are the cookie-cutter M&A benefits: savings, synergies, market share, and EPS accretion.How about that supposedly seismic change in the foundations of motor insurance and risk? Does that factor into projections? After all, the economic value of the intangible assets Aviva is paying up for Direct Line's brand, patents and customer lists relies on long-term profit forecasts. Within a decade, if AV adoption has exploded, the risks of impairment to both the Direct Line business and Aviva's existing motor lines could spike. Should shareholders worry about the £3.7bn deal?It would seem not, based on an hour-long presentation to investors and analysts after the tie-up was recommended. At least, that's the implication. The impact of self-driving cars simply received no mention. When asked about the deal in the context of AV disruption, Aviva declined to comment.Aviva & Direct Line: A new dividend machine?Drive onTo understand why Aviva is prepared to calmly look past the self-driving threat and double down on motor insurance, we need first to consider what those heady AV projections will require.As of January 2025, there are no self-driving vehicles cleared for UK roads. As with electric vehicles, widespread AV adoption will rely on the existing fleet's replacement, rather than its upgrade given the latter isn't possible with current technology. That makes this a gradual shift, at an uncertain rate.This doesn't mean some analysts haven't factored the rise of AVs into their earnings and valuation models. In 2017, Deutsche Bank released a report warning that self-driving cars could lead to an 80 per cent drop in personal motor insurance by 2050. Though it suggested a "meaningful" impact would not be felt for more than a decade, the analyst team estimated the market would start to shrink by 3 per cent a year, on a like-for-like basis, from 2028.Eight years (and several stuttering attempts in the US and China to roll out AVs) later, Deutsche's timeline has been pushed back. Its estimates for the rate of contraction have also thinned. As far as structural declines go, it's all quite vague. But AVs are still in the model. Direct Line's top line, for example, is assumed to climb 2.5 per cent a year until 2034 and fall 2 per cent a year thereafter.The level of adoption is a significant variable. A 2023 report by McKinsey suggested advanced driver-assistance systems and fully autonomous cars "could create $300bn-400bn" in global revenues by 2035. However, this estimate isn't the quantum leap it first looks like. This year, the report assumes the market will hit between $70bn and $100bn, based on current sales of what its authors refer to as level one (driver assistance) and level two (partial driving automation) systems.But it is the so-called level three (conditional driving automation) and four (high driving automation) systems where McKinsey expects all the growth to occur. That's despite a cloudy demand picture: while most drivers say they would pay a significant premium for fully autonomous features, only around a quarter report to being ready to make the switch.For its part, Aviva argues the road to full automation will be long, giving it years to adapt. Is this watch-and-wait stance sensible? Henry Heathfield, an insurance analyst at Morningstar, thinks that while "the big picture headline of [AVs] is concerning...the reality is quite different"."Even if auto manufacturers have the capacity to roll out fully autonomous self-driving cars, how many people will actually have the money to buy these?" he asks, pointing to the manufacturing and affordability challenges created by the rise of electric vehicles.Heathfield also flags the unresolved question of social acceptance, and the preparedness of consumers, fellow road users and car manufacturers to move away from the status quo. Though he expects active driving and assistance features to proliferate, improving safety and fuel efficiency, he believes it is "only in a fully autonomous world...where we lose private insurance".But might insurance take a knock somewhere earlier on that journey? Tom Bateman, an insurance equities analyst at Mediobanca, says that investors are already asking about the sector's long-term viability, not least because driving safety has been steadily improving for several years.If such modest uptake of the technology is already having an impact, this begs the question: might higher-level automation lead to a snowball effect on road safety and adoption, even if released at limited scale? While we're straying into hypotheticals, could huge breakthroughs elsewhere in the world force policymakers' hands in the UK? What if China floods the market with cheap, AV-ready products? Would civil society put up with the personal and economic cost of the 30,000 killed and serious injured each year if (and it's a big if) there was a market fix?For Heathfield, obstacles include inertia, the speed of regulatory change, and the costs of widespread implementation. "It probably took around 25 years for seat belts to become mandatory," he notes. "And although largely absent until the 1980s, airbags still aren't mandatory." How much road?Motor insurers are confident their model will dominate for decades to come.There is plenty of logic to this view. Until we get full AV adoption, the concept of driver liability will endure. Even if adoption proves rapid, cars will still need insuring against theft, non-driving related damage, no-fault claims, and maintenance. The sector also has plenty of lobbying power to shape favourable legislation and regulation.Indeed, the role of regulation helps to explain why Aviva is keen to grow its market share. Tougher oversight of ancillary products has squeezed smaller players, boosting the position of larger incumbents. In turn, greater scale means more efficient and effective pricing.This informational asymmetry, whereby a seller has a far better grasp of a product's value than its buyer, is a big reason why personal line insurance is profitable. But in a future in which the main counterparties are car manufacturers or fleet owners, it's much harder to see the appeal to underwriters. Product liability insurance is notoriously challenging work.The rise of AVs is a trend whose effects are impossible to call. Clearly, its development has long been over-hyped, evoking the American scientist Roy Amara's observation that "we tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run".But there is very little consensus, even on a five-year view, as to when the technology will start to make itself felt. On balance, this probably means this particular investment risk facing Aviva already a well-diversified business can be reduced to a rounding error, for now at least. |
Posted at 17/1/2025 18:30 by xtrmntr ??????Shares in Aviva (AV.) and Direct Line (DLG) have travelled in opposite directions over the past four years. While Aviva is up by 50 per cent, its FTSE 250 rival has fallen by almost a fifth. The discrepancy is even more extreme when dividends are taken into account, given Direct Line suspended payouts in early 2023.The reasons behind the companies' divergent fortunes have been well-documented. While Aviva has slimmed down and refocused under the direction of chief executive Amanda Blanc, Direct Line was caught out by inflation and forced to issue a series of profit warnings in 2022 (it had not adequately reflected rising repair and replacement costs in its motor insurance premiums). After a boardroom shake-up, it is now in the early stages of a turnaround.What were once two separate stories, however, have merged into one. Aviva made a bid for Direct Line last month and, just before Christmas, the deal was finalised. The £2.7bn takeover is expected to close by the middle of 2025 after it has been scrutinised by regulators and the competition watchdog. Shareholders on both sides are now asking the same question: is this a good idea? A sector giant The market was generally enthusiastic about the terms of the deal. Aviva will pay 275p for every Direct Line share, split equally between cash and newly issued stock. This represents a 73 per cent premium to Direct Line's undisturbed share price, and is more than Belgian insurer Ageas (BE:AGS) offered last March.Many Direct Line shareholders will be feeling relieved. Morningstar analyst Henry Heathfield pointed out that the current financial plans for the company are "ambitious", and not guaranteed to be sustainable. "This is a highly competitive industry where Direct Line is up against a highly effective incumbent and has been losing market share as a standalone," he said.For Aviva, the purchase of Direct Line feeds into a strategy that it has been pursuing for several years: to shift away from life insurance and towards 'capital light' work such as motor and home insurance. This is a trend that is occurring "across Europe", according to Panmure Liberum analyst Abid Hussain. This is because the market values general insurers more highly than life insurers. The latter must be able to meet big payment obligations as soon as a contract starts, but they typically receive premiums in instalments over the course of multiple years. On day one, therefore, there is a capital strain and the payback period is lengthy. Motor and home insurance work can be more volatile, but returns tend to arrive faster.There are plenty of other things in favour of the deal. For starters, the combined company will dominate the sector. UBS estimates that Aviva will have a 22 per cent share of the personal lines market after the takeover, compared with Admiral's 13 per cent.Costs are also set to be slashed. Aviva is targeting savings of £125mn within three years of the deal completing, in addition to the £100mn of savings Direct Line is on track to deliver by the end of 2025. Head office and "senior management functions" will be the biggest source of savings, with up to 2,300 jobs expected to be shed. IT platforms will also be consolidated and there should be "increased efficiency" from combining insurance operations. Analysts have flagged "good similarities" between the two companies, noting that they both operate their own garage repair networks, and that combined data and technology could improve underwriting.This clearly isn't risk-free, and will be expensive at first. Aviva expects to incur £250mn of one-off integration costs, three-quarters of which will fall within the first two years. However, even including restructuring costs, management thinks the deal will increase profits in the first full year after completion, and deliver around 10 per cent earnings per share accretion once the cost savings have been realised.Rethinking investor payouts There are more than cost synergies to consider. In the insurance sector, companies have solvency capital requirements to ensure they can meet their obligations to policyholders.The level of capital insurers must hold is dictated by a range of factors, but expanding into new business lines or geographies can reduce the burden. At the half-year mark, for instance, Aviva's solvency capital requirement decreased by £400mn to £7.8bn because it had diversified away from life insurance policies. Adding Direct Line to the group is expected to help this further. "The capital benefit from diversification that will emerge is significant," chief financial officer Charlotte Jones told investors in December.Aviva itself didn't give concrete predictions, but analysts at the Bank of America (BofA) estimate that the deal could free up around £500mn-£600mn of capital.BofA described this as the "cherry on top" of the Direct Line acquisition, which could ultimately fuel higher shareholder payouts. The bank thinks Aviva will return about a third of its market cap between 2025 and 2027, culminating in a 13 per cent yield in 2027, when both dividends and buybacks are taken into account. "This is among the most attractive levels of capital return in the sector," it said.Management is certainly sounding confident for now. It has upgraded its dividend policy and, having bought back £300mn of shares in 2023 and again last year, is set to announce an even bigger buyback in 2026 to reflect the higher share count (it won't be buying back shares this year, given it needs cash for the acquisition).Since income is the big appeal of UK insurance stocks, this paints a compelling picture. It is important to remember, though, that mega deals are difficult to pull off."We don't typically like mergers and acquisitions and mainly view them as value-destructive," said Morningstar. The ratings agency is feeling optimistic in spite of this but only time will tell if it was right to let its guard down. |
Posted at 23/12/2024 14:13 by leedsu36 Aviva (AV.L) said it plans to achieve annual pre-tax cost savings of at least £125m through job cuts, "economies of scale and increased efficiency".Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "Christmas has come early for Direct Line investors, as Aviva's £3.7bn buyout has officially been signed, sealed, and delivered. The terms of the deal remain unchanged from what was floated to the markets earlier this month, and the festive confirmation has wrapped up what many investors had already baked into expectations, leaving little surprise under the tree. "This deal strikes a balance that seems to deliver value for both parties. Direct Line has been navigating choppy waters, with its market share steadily eroding and a history of missteps from previous management leaving the ship off course. While the new management team has been working to steady the vessel, even they couldn't deny that Aviva's offer was the golden ticket they'd struggle to replicate on their own. Though they've expressed confidence in their independent strategy, this proposal was simply too compelling to pass up. "For Aviva, the price tag is sitting on the edge of what might be considered a bargain, but the strategic potential could prove to be a real cracker. Acquiring Direct Line cements Aviva's status as the heavyweight champion in the UK home and motor insurance markets. Beyond bolstering their market dominance, the deal unlocks opportunities to put the Direct Line transformation on the fast track, while capitalizing on the efficiency gains that come with increased scale. It's a bold move that could turn out to be a gift that keeps on giving." |
Posted at 11/11/2024 12:40 by nerja AVIVAIt’s been a good year for the Aviva AV. 0.77% share price. The stock hit a floor in 2020, but in the last few years it has made a strong recovery. The insurance giant’s shares are up 20.16% over the last 12 months. As inflation falls and the Bank of England continues to cut rates, Aviva will look more attractive to income seekers once savings rates and bond yields start to fall. eyeQ’s smart machine shows the model is back in regime. Investors need to understand the big picture stuff moving the stock: lower volatility, higher growth and more risk averse investors. The stock currently sits 4.52% under eyeQ model value and the machine fired a bullish signal. For bulls, this could be a steal and eyeQ is telling you that it is the right time to add this stock, but don’t forget to do your own research and keep on its trading update scheduled for Thursday before making a final decision. Taken from eye a on ii |
Posted at 20/9/2024 17:57 by xtrmntr Three is no doubt that insurance companies are nowadays one of the most important dividend shares for income.They are attractive not because of the volume of dividends they rarely feature in the top 10 payers on that metric, and the 50 per cent cut flagged by Vodafone earlier this year is, on its own, bigger than the entire closely watched payout for Legal & General (LGEN).Interest instead stems from the relative cheapness of their shares. The attraction of inflation-beating yields is hard to match of the top six highest yielders in the FTSE 100, four are insurance companies, according to FactSet data.The question is whether those high yields are truly reflective of the level of risk that shareholders take when buying the shares. As ever, some are safer than others. Aviva (AV.) is an interesting example of a popular high yielding insurance share that reflects one basic truth: it is the largest insurance company in the UK to have comprehensively gotten its house in order.What was once a sprawling group built up by a seemingly arbitrary series of bolt-on acquisitions has been slimmed down to focus on the UK, Ireland and Canada, with clear delineation between the life, motor and personal insurance lines.The company's current health is also driven by the fact that costs have been tightly controlled at the same time as demand for annuities has picked up significantly. Aviva will write £7bn-£8bn of bulk annuities business this year, as defined benefit pension schemes' funding levels improve, allowing companies to offload future liabilities to insurers and simplify their own operations.But the most important reason for Aviva's popularity with retail investors is that the current management, led by chief executive Amanda Blanc, has also kept its word to shareholders when it comes to payouts. After raising £7.5bn from business sales, the company paid out £4bn of capital to shareholders by the middle of 2022.Fulfilling this commitment is no guarantee that dividends will continue to grow over the next couple of years, but current forecasts are for dividend growth in "mid-single digits" this year, or 5 per cent in old money, with a 7 per cent growth rate forecast for the following period, according to predictions by broker Berenberg. That translates into a current dividend yield of around 7 per cent, rising to 8 per cent at a price-to-book value of just 1.3 times. One reason to be cautious is that Aviva's operating profit target of £2bn by 2026 could be quite punchy if premium rates start to moderate, in which case the annuities business would have to take up more of the slack. Currently, general insurance premiums are forecast to rise at around 9 per cent for next year. What might be needed to ensure the future health of the dividend is for Aviva to smooth out its free cash flow. This has been exceptionally lumpy in the recent past, partly because of asset sales, but it is notable that the company is forecast to book cumulative cash flow growth of 12 per cent over the next two years. This seems to underline the fact that simplifying the business and focusing on what the company does best will prove profitable for income investors.Dividend policy: Cash cost of the dividend to grow by mid-single digitsYield: 7.2 per centPayment: Semi-annually, in sterlingLast cut: 2020AlternativeLegal & General surprised the market earlier this summer not via a 5 per cent increase in the dividend this year, topped up by share buybacks, but with forecasts that the two years through to 2027 would see a reduced 2 per cent annual increase, buybacks again substituted to try to make up the shortfall. It was the first substantive act from new chief executive António Simões and showed management's determination to improve LGEN's core operating profits. Income investors may not quibble too much about this change of direction given the forward dividend yield remains well above 9 per cent. |
Posted at 15/8/2024 08:13 by kenmitch Note the different share price response to the good Results from AVIVA yesterday and Admiral today. AVIVA share price flat. Admiral share price up 8%.Why the big difference? Is it perhaps because Admiral have spent excess cash on the genuine reward of a special dividend on top of the increased ordinary dividend. I.e investors get the big bonus of real cash. AVIVA prefer to waste the spare cash on buybacks where unfortunately investors don’t get any real cash. RIO current dividend yield is 6% but a couple of years ago they rewarded investors with 20% dividend via big special dividends on top of their ordinary dividends. Fortunately more and more UK Companies are now paying special dividends instead of buying back. e.g Big Mining Companies like RIO now always go for big special dividends in the good years. Previously they spent multiple £billions on buybacks…..onl |
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