Aviva hikes dividend as first-half profits rise

Aviva chief executive Mark Wilson. Picture: Contributed
Aviva chief executive Mark Wilson. Picture: Contributed
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Insurance giant Aviva today announced a 10 per cent rise in its dividend as it reported higher profits for the first half of the year.

Shareholders will receive an interim payout of 7.42p a share, up from 6.75p a year ago, after operating profits for the six months to the end of June grew 13 per cent to £1.3 billion.

In the wake of the Brexit vote, Aviva chief executive Mark Wilson pointed out that 42 per cent of the group’s earnings come from outside the UK, but added: “Just to be clear, we like the UK.

“We have one the best-funded pension schemes in the UK. We fixed the roof while the sun was shining.”

Aviva employs about 2,500 people in Scotland, with its main sites north of the Border at Perth and Bishopbriggs.

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With the Bank of England’s monetary policy committee widely expected to announce a cut in borrowing costs today, Wilson said: “We have structured our business not to be sensitive to interest rates. The market is expecting a 0.25 per cent cut but we’re not sure what it is meant to achieve.”

Aviva’s digital arm contributed £111 million of profit in the first half, and Wilson said: “Digital is our future. We want to own that space in the UK. It has much higher margins. We think we have 30 per cent lower costs in our digital business. We have the products and systems and we are getting pretty good at it.”

The Aviva boss said the growth shown in its interim results were “in line with, or better than” City consensus forecasts.

While he admitted that the current economic environment was uncertain, he added: “We have structured ourselves to be a blue-chip haven over difficult times.”