LONDON (Reuters) -British insurer Aviva set itself new financial targets including nearly doubling cost savings from its combination with Direct Line, it said on Thursday, as CEO Amanda Blanc looks to convince investors the enlarged firm can deliver.
The company said it would target growth in earnings per share of 11% per year to 2028 and would resume larger share buybacks from next year, adding it would hit its existing targets a year early.
Shares fell 4% in early trading, having been up 48% year-to-date ahead of the announcement.
“With high investor expectations heading into the event, we expect there could be some weakness in the shares today,” analysts at RBC said in a note.
Aviva secured the largest takeover of Blanc’s tenure earlier this year when it closed its acquisition of motor insurer Direct Line for 3.7 billion pounds ($5 billion).
The insurer said it now expects to make 225 million pounds of cost savings from combining the two businesses, nearly twice its original estimate.
Aviva said general insurance premiums were up 12% to 10 billion pounds over the first nine months of this year, while its wealth business generated 8.3 billion pounds of net inflows over the period, up 8% on the prior year.
The insurer said it expected to deliver 2 billion pounds of operating profit this year, hitting its target a year early.
($1 = 0.7451 pounds)
(Reporting by Yamini Kalia in Bengaluru; Editing by Mrigank Dhaniwala and Jan Harvey)
