Nov 30, 2017
Aviva finds best use of £3bn is not too complex a question
Can you have too much insurance? If you are Aviva - the FTSE 100 provider of life, home, motor, health, personal accident, travel and pet cover, not to mention pensions and savings - arguably, yes. Staff and shareholders might argue that not doing too much has delivered too little, though. Having gone from a period of losing money and destroying capital, Aviva now has sufficient earnings and cash to increase shareholder payouts. The cash position has improved so much that Aviva now has an excess £3bn to repay debt, make acquisitions and fund "Additional returns to investors". Can you have too much cash, though? Arguably no, if it is used to repay expensive debt - and Aviva says £900m of the £3bn will be, boosting earnings by £100m a year.
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