Aviva posted a 25% jump in operating profit to £2.203 billion for 2025, with its takeover of Direct Line and strong results across the group helping the British insurer hit its 2026 financial targets a year early.
The results cap a fifth straight year of profitable growth for one of Europe's biggest insurers. Group earnings per share climbed 17% to 56.0p, IFRS profit surged 50% to £1.054 billion, and return on equity reached 17.5%.
The £3.7 billion Direct Line acquisition, completed in July, contributed £174 million to operating profit. Even stripping that out, the group still grew profit 15% year on year.
Aviva had faced resistance when it first approached Direct Line in late 2024, with its initial 250p-per-share offer rebuffed as "highly opportunistic," Financier Worldwide reported at the time. The insurer eventually agreed a price of 275p, representing a 73% premium.
Integration has since outpaced expectations. Aviva originally guided for at least £125 million in annual cost synergies but had already doubled that target to £225 million by November 2025.
Hargreaves Lansdown analyst Matt Britzman noted at the time that savings were "well ahead of expectations" and should help restore solvency levels faster. Morningstar assessed the deal as bringing a double-digit increase in earnings per share.
In Canada, where Aviva is the second-largest property and casualty insurer with roughly 9% market share, gross written premiums grew 2% on a constant currency basis to £4.358 billion. Personal lines premiums rose 6% to £2.813 billion on pricing actions in auto and property, though commercial lines declined 5% as the insurer shed unprofitable accounts.
Operating profit jumped 49% to £408 million on a constant currency basis, with the undiscounted combined operating ratio improving 2.9 percentage points to 95.6%. Aviva is targeting a combined ratio approaching 94% in 2026.
Those results trail market leader Intact Financial Corporation, which reported a full-year 2025 combined ratio of 88.2% and operating return on equity of 19.5%. Intact chief executive Charles Brindamour said in the firm's fourth-quarter results that direct premiums written have tripled over the past decade to $25 billion. However, the broader Canadian personal auto sector has posted an industry combined ratio above 100% for the first nine months of 2025, a backdrop that makes Aviva Canada's personal lines ratio of 94.7% stand out.
The board declared a final dividend of 26.2p per share, up 10%, and announced a £350 million share buyback. Aviva set new three-year targets including 11% compound annual growth in operating earnings per share through 2028 and return on equity above 20%.
The full-year results come as the insurer also flagged deployment of artificial intelligence across claims, underwriting, and customer experience.
