Shares in Aviva have soared after the group's boss promised to give cash back to shareholders following its 2016 results, batting away the impact of a new injury compensation rule that has clobbered insurers.
Chief executive Mark Wilson said that the group would raise the dividend by 12pc to 23.3p because of its stronger balance sheet, announcing the step in a 90-second YouTube video on Thursday.
Aviva's pre-tax profit rose more than 50pc to £1.8bn in the year to December 31. However the group was not immune to the impact of a change in the so-called Ogden rule, used to calculate the amount paid out to victims with life-changing injuries; its after-tax profit fell 22pc to £859m as a result.
UK insurers Admiral and Direct Line reported similar falls this week, following the Ministry of Justice's decision last month to chop the discount rate from 2.5pc to -0.75pc.
Mr Wilson brushed off the effect of the rate change, instead drawing attention to the fact that Aviva has "more operating profit, more capital, more cash, more dividend. And there is more to come".
Investors sent the insurer's shares up more than 6.6pc, with one commenting that the firm had turned around from what used to be "a bit of a mess".
"It always takes time to change investors' opinions, and I think today is the trigger point where suddenly people realise it is a strong, capitalised group," said Ben Wallace, a fund manager at Henderson. "The penny is dropping over how strong it will be going forward."
Mr Wallace praised the management team for "fixing Aviva" in the last year, noting that "today is a realisation that the fixing is complete" .
Meanwhile Mr Wilson insisted that the UK remained central to Aviva's plan, noting that "we are growing in the UK, we are investing in the UK. We like the UK".
He rebuffed any suggestion that Aviva would expand the group's asset management arm through a merger, as rival Standard Life plans to do with Aberdeen Asset Management, telling Bloomberg TV that he was not interested in any "jumbo deals".
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