* Operating profit up 12 pct to 3 bln stg
* Total dividend up 12 pct; to pay out more in 2017
* Shares up 5.6 pct, top gainer in the FTSE 100
(Adds detail from statement, CEO quote, analyst quote, share
By Simon Jessop
LONDON, March 9 British insurer Aviva
generated forecast-beating annual profit, boosted by growth in
general insurance and asset management, and said more of its
growing cash pile would be handed back to shareholders in 2017,
sending its stock higher.
Aviva, which traces its roots to the sale of fire insurance
in 1696, on Thursday posted a 12 percent increase in operating
profit to 3 billion pounds ($3.65 billion), driving strong cash
generation and improving its capital position.
Offering both life and general insurance such as motor and
home cover, Aviva is less exposed than more specialised motor
insurers Admiral and Direct Line to a
government change to the calculation of lump sum payments in
personal injury claims.
"Aviva's results are simple and clear cut: more operating
profit, more capital, more cash, more dividend. And there is
more to come," Chief Executive Mark Wilson said.
On a call with journalists, he said the company would look
to use some of the cash to pay down high-cost debt, and was
leaning towards doing a share buyback, although no decision had
yet been reached.
Aviva's share price rose 7 percent to 546p by 0940 GMT, the
top gainer on the FTSE 100 index.
The company said its performance was helped by a strong rise
in cash remittances from its various business units, up 20
percent to 1.8 billion pounds, helped by a 15 percent rise in
general insurance net written premiums to 8.2 billion pounds.
Life insurance operating profit increased 8 percent to 2.6
billion pounds, helped by growth in protection, pensions and
individual annuities in the UK, protection sales and currency
effects in Europe.
Fund management operating profit, meanwhile, rose 30 percent
to 138 million pounds, boosted by a rise in group assets under
management to 450 billion pounds, an increase in revenue margin
and improved cost to income ratio.
The company said it would pay a total dividend for the year
of 23.3 pence a share, up 12 percent.
Strong cash generation of 3.5 billion pounds helped the
firm's Solvency II capital ratio, the rainy day cash buffer to
any market shock, rise to 189 percent from 180 percent in 2015.
That gave a surplus of 11.3 billion pounds, up from 9.7
billion pounds last year, and as it is above the firm's flagged
range of 150-180 percent, Aviva said it was "actively planning
to return additional capital to shareholders and reduce hybrid
debt in 2017".
Ben Wallace, fund manager at Henderson, an investor in
Aviva, said the firm's broad geographical and product spread
helps its capital position, a positive for investors.
($1 = 0.8227 pounds)
(Additional reporting by Carolyn Cohn; Editing by Keith Weir)