LONDON, Nov 30 (Reuters) - British insurer Aviva expects to spend 3 billion pounds ($4.04 billion) in excess cash over the next two years, the bulk of it in 2018, the insurer said on Thursday.
It expects to deploy 2 billion pounds next year, by spending 900 million pounds on repaying debt, making “bolt-on” acquisitions and returning cash to shareholders, it said in a statement ahead of an investor day in Warsaw.
“After a few years of restructuring, our businesses are now high quality and we expect good, sustainable growth from each of them,” chief executive Mark Wilson said.
Insurers and reinsurers have been giving cash back to shareholders as strong competition cuts opportunities for expansion.
Aviva has said it is only looking for small acquisitions following its 5.6 billion pound ($7.54 billion) purchase of Friends Life in 2015.
Aviva said it was raising its expectations for earnings growth to more than 5 percent annually from 2019 onwards, from a previous target of mid-single digit growth.
It also said it would increase its dividend pay-out ratio to 55-60 percent of earnings per share by 2020, from a previous 50 percent.
The new targets were “achievable”, JP Morgan analysts said in a note, reiterating their “overweight” rating on the stock. ($1 = 0.7424 pounds) ($1 = 0.8428 euros) (Reporting by Carolyn Cohn)