Aviva share price falls 3% after CEO warns of ‘muted’ 2019

The insurer saw its share price fall on Thursday, despite reporting growing profits, after its new CEO offered a disappointing outlook for 2019.

Aviva made steady progress in 2018, with the insurer seeing decent profits growth, which allowed the company to increase its full-year dividend.

But despite recording a strong set of full-year results, the company’s share price edged 3% lower on Thursday morning, after its new CEO Maurice Tulloch warned that of a ‘muted’ outlook for 2019.

‘Given current uncertainties, including the unknown future impacts of Brexit on the economies of the UK and Europe, our near-term outlook entering 2019 is more muted than our outlook a year ago,’ Tulloch said.

‘While we achieved 7% operating EPS growth in each of the past two years, it will be difficult to sustain this momentum in 2019.’

Aviva results: key figures

The insurer recorded a 2% increase in operating profit to £3.1 billion, with cash remittances up 31% to £3.1 billion.

Aviva’s Solvency II capital surplus fell slightly to £12 billion from £12.2 billion a year prior, with the insurers Solvency II cover ratio at 204%, up from 198% in 2017.

‘Looking forward, our capital management plan will prioritise debt reduction for the foreseeable future,’ Chairman Adrian Montague said. ‘We plan to reduce debt by at least £1.5 billion by the end of 2022, saving approximately £90 million per year in interest expenses.’

‘This builds on the £1.4 billion of debt repaid over the past two years and will further enhance our financial flexibility,’ he added.

Aviva increases dividend after strong 2018

The insurer’s performance over the course of 2018 helped it to increase its full-year dividend, with the company offering a final pay-out of 20.75p a share, bringing its total 2018 dividend to 30p per share.

‘The security and sustainability of our dividend remains paramount,’ Montague said.

‘We are moving to a progressive dividend policy, which will see the dividend maintained or grown over time depending on business performance and growth prospects.’

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

European Central Bank meeting

Learn about how the ECB meeting affects interest rates and price stability ahead of the next announcement on 24 October 2019.

  • How might the next meeting affect the markets?
  • What are the key rate decisions to watch?
  • Why is the Governing Council announcement important for traders?

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Updated
Change

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.