YORK-based Aviva has said it is in a strong financial position after a 'robust trading performance' as it announced its results for the third quarter of 2020.

The insurance giant which is one of York's largest employers has continued to focus on its core markets, after a steady recovery from the impact of the Covid-19 pandemic on its share price earlier this year.

The company used the release of its quarter three results as an opportunity to thank staff for their work during the crisis.

Chief executive officer Amanda Blanc who took over the reigns in July said: “We are making good progress in our strategy to simplify Aviva’s portfolio and have recently announced the sale of Aviva Singapore and Aviva Vita in Italy for £2 billion.

"We are announcing today a new sustainable and resilient dividend policy, based on our core markets of the UK, Ireland and Canada.

"As we simplify Aviva’s portfolio, we will deliver further value to shareholders by returning excess capital above 180% solvency cover ratio#, once our debt leverage target ratio has been reached.

The Board has declared a 7.0 pence per share interim dividend in respect of the 2020 financial year which will be paid in January 2021. The Board currently expects to recommend a final 2020 dividend of 14 pence per share which is subject to a final decision to be taken in March 2021.

The expected 2020 total dividend of 21.0 pence per share is then expected to grow by low to mid-single digits.

"Our trading performance is robust and our financial position is strong with a capital surplus of £11.8 billion. The first nine months have demonstrated Aviva’s ability to grow in core markets where we have attractive, long-term growth prospects.

"Bulk purchase annuities sales increased to £5 billion, which is a record for Aviva and commercial insurance premiums are up 9% across the UK, Canada and Ireland.

"The response of our people to the Covid crisis has been nothing less than phenomenal and I would like to thank them for all they have done for our customers this year. We continue to work at pace to deliver our strategy, support our customers, and unlock value for Aviva shareholders.”

Aviva reported a 13.8% decline in the value of new business (VNB) written by its life insurance business, which stood at £714m in the first nine months of the year.

Nicholas Hyett, Equity Analyst at Hargreaves Lansdown, said: “Aviva is retreating to its core UK, Ireland and Canadian markets.

"That’s part of a long running trend. While the patchwork of Asian joint ventures never really contributed much to profit, the winddown of European operations really is the nail in the coffin of the group’s global ambitions.

"The good news is the core markets do seem to be performing reasonably well – with bulk annuities driving growth in UK life insurance, and the savings and investments businesses also showing some signs of sustained progress. That should underpin the reduced dividend going forwards, helped by a formidable capital surplus.

"While the dividend cut is unwelcome for existing shareholders, a reliable yield of around 6.5% may be attractive to new investors.

"Unfortunately, Aviva remains mired in untangling its historic network of businesses, and that will inevitably distract both investors and management from a core business that is showing some signs of promise.”