Aviva has seen its shares surge higher after it increased its dividend following better-than-expected figures and said it is planning more share buybacks.

The stock leapt 12% higher on Wednesday as the insurance giant pledged to unveil more investor returns at the end of its full year, having already dished out £4.75 billion to shareholders after selling off chunks of the business in recent years.

It came as the group reported a 14% rise in half-year operating profits to £829 million for the first half of 2022.

Aviva said it is increasing its interim dividend payout by 40% to 10.3p a share.

The firm has come under pressure from activist investor Cevian, which has been pushing for £5 billion in cash returns by the end of 2022.

Aviva group chief executive Amanda Blanc said: “Delivering for our shareholders is at the core of our strategy.”

But she added: “We are very conscious of the pressures currently facing many of our customers, especially the more vulnerable.

“In response we have launched new, low-cost insurance products, and we are increasing the range and amount of support we provide to communities, businesses and our own people during this challenging time.”

Last week, Aviva told staff it will be handing a one-off cost-of-living payment of up to £1,000 to nearly 7,000 employees after the group became the latest firm to offer financial support to struggling workers.

The payment will be made to more than 6,000 employees in the UK who are on full-time salaries of less than £35,000, and an equivalent sum will be made to eligible staff in Canada and Ireland.

Ms Blanc said: “We have made financial commitments to communities to provide advice and support to vulnerable people and businesses, continued to provide affordable but robust products and premium deferral options, and we are making a one-off payment to help 7,000 of our colleagues.”