Welcome to our shareholder update for December 2018.
In this edition of your shareholder update you can read about:
- Mark Wilson steps down – reactions from our Chairman and Investors
- Capital update – share price, buyback and bond redemption
- Aviva’s Remembrance services
- Caring for our employees and customers - Living Wage week, our parental leave policy and AvivaPlus
Dear Shareholder,
As I am sure you are aware by now Mark Wilson stepped down as CEO in October this year. The Board and I have put on record our thanks to Mark for all he achieved, not least improving the group’s financial performance. Having delivered the successful turnaround, the time is right for new leadership to take the group to its next phase of development.
During the transition period, I have taken on executive responsibilities while we seek to appoint a new CEO. We are considering both internal and external candidates and expect to complete the process within the next two months.
In the meantime, we have a strong leadership team focused on delivering excellent service for all our customers. Aviva is in a great position to accelerate our strategic development and I remain confident we will continue to deliver long-term growth for the benefit of our customers, our people and you, our shareholders.
Thank you for your continuing support.
Sir Adrian Montague, Executive Chairman
Mark Wilson steps down – Investor reaction
Mark Wilson stepping down as group CEO was the primary focus for shareholders this quarter. It was a busy period for Sir Adrian and the Investor Relations team speaking with many of our major shareholders. Investor feedback recognised the significant achievements made under his leadership in strengthening the financial performance and balance sheet. Investors were understanding that a new style of leadership and focus was appropriate as Aviva enters its next phase of development.
Share price update
The announcement that Mark Wilson was stepping down coincided with tumultuous moves in the global stock markets in early October, lead by the US market. Share prices in the UK and Insurance sector came under heavy pressure.
Moving through the quarter, ongoing political uncertainties in the UK also weighed heavily on UK stocks. The Aviva share price was not immune, despite confirmation at the time of the CEO announcement on 9 October that the group remains on track to deliver on its targets:
- operating earnings per share growth of greater than 5% in 2018
- a dividend pay-out ratio of 55-60% of operating earnings per share by 2020.
Useful links for shareholders
Completion of share buyback programme
On 18 September, we announced the successful completion of the share buyback programme, which was notified to the market on 1 May 2018. As a result of the programme, Aviva acquired 119,491,188 shares at an average price of £5.02 per share.
Announcement of bond redemption
On 4 October, Aviva gave notice to bondholders of the group’s intention to redeem the $575m 7.875% Friends Life Holdings plc bond in full on 8 November 2018.
This is the first optional redemption date for the bond and completes our plans to redeem a total of £0.9bn bonds as part of our stated 2018 capital deployment.
Aviva’s Remembrance services
On 9 November, we hosted Remembrance services across the UK to remember those who lost their lives during the First World War.
Sir Adrian Montague welcomed Rev. William Taylor, members of the Aviva Executive, the Military Wives Choir and members of the armed forces to lead the commemorative service in London.
We unveiled a new sculpture by Nicholas Dimbleby on our London piazza. The memorial is entitled ‘Absent’ and will provide a focal point for Remembrance services in years to come.
Sir Adrian joined employees, pensioners, shareholders and relatives of those who died in the ‘Great War’ to lay wreaths at the sculpture commemorating all those who lost their lives.
Over 6,000 men left their Aviva heritage company jobs to fight in the First World War. 925 didn’t come home.
Celebrating Living Wage Week
Transcript for video Aviva is proud to pay the real Living Wage
Two years ago, I made a film about the Living Wage and the difference it made to me. Today I've come to Bristol to talk to my colleagues about the difference that the Living Wage has made to their lives.
So what's the Living Wage allowed you to do that you couldn't do before?
It’s been taking my kids out on day trips, the presents a bit more better and the same with the wife buy her - her presents are a bit better. And buy her more stuff, like flowers, which I couldn't afford before.
So all I can say is that of all companies done this, people that's working for them would be a lot better off and happier in their job.
And how long have you worked for Aviva?
10 years.
Oh, so you’re what we would call an oldie not a newbie.
Yes.
So you remember what it was like before you were paid the Living Wage?
Oh, yes. Before I do full-time here, six hours in the morning, two hours in the evening, and sometime we do overtime Saturday and Sunday.
So your quality of life is now better?
Yes. More better, definitely more better.
What you guys are saying here is that Living Wage is going to make a lot of difference to your life.
My stress levels have gone down. You enjoy, you get the quality of life now and you get the work/life balance, which you couldn't have before because you had to work the extra hours.
And of course there’s always a little bit of money left over, hopefully.
Yeah, and obviously I can afford to go on holiday now, which I couldn't do before. So there’s lots of things.
Yes. And so you'll carry on working for a Aviva, obviously?
Oh, I’ve got no intention of leaving. I'm here until I retire. Definitely nothing - not planning on going nowhere.
By coming down to Bristol today I've learnt that my colleagues have benefited immensely from the Living Wage, just as I did.
I'd like to think, if we can get one more large company to pay the Living Wage, then we've done a good job.
Everyone working at Aviva in the UK, whether they are a permanent employee or an on-site contractor receives at least the Living Wage. This is independently calculated every year to meet the real cost of living and means all our people get a fair day’s pay for a fair day’s work.
We’ve been accredited members since 2014. It isn’t just a good thing to do, it makes good business sense too. Our people have told us they feel more motivated in their roles, happier in their jobs and proud to work for Aviva.
You can see the difference it has made for some of our team in Bristol by watcing the video above.
Parental leave: one-year anniversary
Transcript for video Aviva Equal Parental Leave
Having six months off. I got to witness things that I just would have missed as a father.
The six months parental leave has been brilliant. We've really built a family bond together.
We've got the same manager and he's always really supportive.
It's never come into question that my career might be in jeopardy for having six months off.
To know that I could have six months off at full pay it was almost just a huge relief.
It's just unbelievable, you know, you tell people about it and they just don't believe it.
In November we celebrated the one-year anniversary of our ground-breaking equal parental leave policy. We want to create a working environment where diversity thrives. We want to help create a level playing field for men and women who want to take time out from their careers to spend with their family.
So, a year ago we introduced a new group-wide equal parental leave policy. Aviva Employees in UK, Ireland, France, Singapore and Canada who become parents get the same amount of paid and unpaid time off, regardless of gender, sexual orientation or how they became a parent (birth, adoption or surrogacy).
One year on we’re pleased that many of our people around the world have made use of the scheme. The average number of paternity days taken by our UK dads has increased by more than 14 times.
AvivaPlus
Customers are telling us loud and clear that they don’t feel valued or rewarded for being a loyal customer. We’re taking a stand against the problems of the industry on behalf of dissatisfied customers with AvivaPlus, which offers simple, flexible insurance cover, monthly payments with no APR, no charges to cancel or change and a renewal price guarantee for home and car insurance.
Aviva is currently at the start of the roll out phase for AvivaPlus for customers and has talked to media about AvivaPlus.
For more information visit:
www.aviva.co.uk/insurance/avivaplus/avivaplus-car-insurance/
Stay in touch
We’ll share another shareholder update in March 2019. Register with Computershare to receive an alert when these updates are available.
If you have any feedback or suggestions for our shareholder update, please email aviva.shareholders@aviva.com
