Aviva has reported another quarter of strong growth and profitability, with the group now expecting to meet its 2026 financial targets a full year ahead of schedule.
The insurer’s transformation over the past five years, combined with the ongoing integration of Direct Line, has positioned Aviva to deliver improved outcomes for both customers and shareholders, according to group chief executive officer Amanda Blanc (pictured).
“Over the last five years we have transformed Aviva, delivering again and again for our customers and shareholders,” she said. “We continue to make excellent progress and now expect to achieve our financial targets in 2025, one year early. Crucially, we have achieved this significant milestone thanks to the consistently strong performance of Aviva, before any impacts of the Direct Line acquisition are included.”
The integration of Direct Line, which Aviva acquired earlier this year, is described as “well underway,” with Blanc expressing growing confidence in the benefits the deal will bring. She noted that Aviva now expects to achieve £225 million in cost synergies - nearly double the original estimate - and unlock at least £500 million of capital synergies. The group also expects to resume share buybacks next year, at a higher level to reflect the increased share count. Direct Line’s own £100 million cost reduction programme has already been completed, three months ahead of plan, and Aviva anticipates that the full run-rate of cost synergies will be achieved by 2028.
Blanc highlighted that Aviva’s third quarter numbers reflect profitable growth across all business lines. General insurance premiums rose 12% to £10 billion, while the group’s wealth business secured net flows of £8.3 billion and now manages £224 billion in assets. The insurer is accelerating its shift toward capital-light business, with the aim of having more than 75% of its operations in capital-light areas by the end of 2028. “This is good news for shareholders, as we deliver stronger growth and better returns, using less capital,” Blanc said.
Looking at the UK and Ireland, general insurance premiums climbed 17% to £6.7 billion, driven by a 24% increase in personal lines - reflecting both the Direct Line acquisition and growth in broker partnerships - and a 10% rise in commercial lines, supported by Probitas and new business. In Canada, general insurance premiums increased 3% in constant currency to £3.3 billion, with personal lines up 7% following favourable pricing actions, though commercial lines were down 4% after the exit of some unprofitable accounts earlier in the year.
The group’s combined operating ratio improved to 94.4% on an undiscounted basis, compared to 96.8% a year earlier, reflecting strong price adequacy and improved weather-related claims experience. Discounted, the combined operating ratio stood at 90.4%, down from 92.8% last year.
Protection and health sales were £384 million, down 5% year-on-year due to the consolidation of propositions following the AIG acquisition, but margins improved and health in-force premiums rose 14%. Retirement sales reached £5.3 billion, with bulk purchase annuity volumes at £3.9 billion. Individual annuity and equity release sales were up 24% and 39%, respectively.
Aviva Investors also delivered stronger results, with external net flows of £0.7 billion - an 18% increase on the prior year - driven by multi-asset fund inflows and a large institutional mandate.
The group remains in a strong capital and liquidity position, reporting an estimated Solvency II shareholder cover ratio of 177% following the Direct Line acquisition, and centre liquidity of £2.2 billion at the end of October. Aviva expects its full-year 2025 Solvency II cover ratio to remain broadly consistent with the third quarter, subject to market movements.
Looking ahead, Blanc said: “The outlook for Aviva has never been better. The advantages of our diversified business, 25 million strong customer base, and majority capital-light earnings, mean we expect to deliver more and more for our shareholders and customers. And so today we are also setting new financial targets, raising our ambitions yet again, and reflecting the strength of our confidence in the continuing growth potential of Aviva.”
Aviva is now targeting an 11% compound annual growth rate in operating earnings per share between 2025 and 2028, expects to deliver an IFRS return on equity of around 17% in 2025 and more than 20% by 2028, and is aiming for over £7 billion in cash remittances between 2026 and 2028.
The group’s guidance for shareholder distributions remains unchanged, with a 10% increase in the 2025 interim dividend reflecting both the usual mid-single digit uplift and an additional increase following the Direct Line deal. Aviva expects to reintroduce regular and sustainable returns of capital alongside its full-year 2025 results, with the amount increased to reflect the higher share count.
Blanc concluded that Aviva’s diversified model, scale, and capital-light focus mean the group is well positioned to deliver further growth and value for both customers and shareholders in the years ahead.
