Key Highlights
- Operating profit for the first half reached £1.33 billion, a 24% increase that surpassed the £1.26 billion analyst projection
- General insurance gross written premiums soared 29% to £8.1 billion following the Direct Line takeover
- Net inflows in wealth management climbed 32% to reach £7.6 billion
- Cash remittances increased 47% to £1.5 billion; insurer confirms three-year financial objectives
- Half-year dividend increased 7% to 14 pence per share
The British insurance giant reported first-half operating profit of £1.33 billion, marking a 24% improvement from the prior year’s £1.07 billion figure. The performance exceeded analyst expectations of £1.26 billion. Shares gained 0.84% to reach 719.60p in trading after the announcement.
Earnings per share on an operating basis increased 10% to 31.8p. This progression maintains the company’s trajectory toward achieving its 11% compound annual growth objective extending through 2028.
The £3.7 billion Direct Line takeover proved instrumental in driving results. Gross written premiums across general insurance operations surged 29% to £8.1 billion, surpassing the £7.8 billion consensus estimate.
Chief Executive Amanda Blanc highlighted the company’s swift actions to enhance Direct Line’s profitability, expand sales through price comparison platforms, and preserve customer service quality.
The integration process transferred all Direct Line staff members. Additionally, close to £5 billion in assets were relocated to Aviva Investors.
The insurer has achieved £100 million in run-rate cost synergies, progressing toward a £225 million objective. Management confirms it remains on course to realize over £350 million in capital synergies before year-end.
Wealth Division and Cash Flow Strength
The wealth management segment recorded a 32% increase in net inflows to £7.6 billion. This robust showing provided substantial support to consolidated results alongside the insurance operations.
Cash remittances surged 47% to £1.5 billion. Management projects cumulative remittances exceeding £7 billion across the 2026-2028 period.
The Solvency II shareholder cover ratio registered at 176%, positioning near the upper boundary of its operating range. Projections indicate this metric will reach the high 180s by December, contingent on market dynamics.
IFRS return on equity strengthened to 20.3% from 18.2%, achieving the company’s threshold of above 20%.
Shareholder Returns and Forward Guidance
The insurer boosted its half-year dividend by 7% to 14 pence per share.
Management reaffirmed its three-year objectives: 11% operating EPS expansion, IFRS return on equity exceeding 20% by 2028, and aggregate cash remittances surpassing £7 billion.
Aviva anticipates 2026 operating EPS growth will align broadly with its 11% target.
Approximately £0.8 billion in additional cash remittances are projected for the second half of the current year.
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