Aviva (AVVIY) Stock Climbs as H1 Profit Surges 24% on Direct Line Integration

Key Highlights

• Operating profit for the first six months increased 24% to reach £1.33 billion, surpassing analyst expectations of £1.26 billion
• The Direct Line integration pushed general insurance gross written premiums higher by 29% to £8.1 billion
• Net inflows in wealth management surged 32% to £7.6 billion
• Cash remittances climbed 47% to £1.5 billion; the company confirms its three-year financial objectives
• Half-year dividend increased 7% to 14 pence per share

Aviva reported operating profit of £1.33 billion for the first half, representing a 24% increase from the prior year’s £1.07 billion. This performance exceeded the analyst consensus estimate of £1.26 billion. Shares traded 0.84% higher at 719.60p after the announcement.

Aviva plc, AVVIY

Operating earnings per share advanced 10% to 31.8p. This progress maintains Aviva’s trajectory toward achieving its 11% compound annual growth objective through 2028.

The £3.7 billion Direct Line takeover proved instrumental in driving results. Gross written premiums in general insurance expanded 29% to £8.1 billion, outperforming the £7.8 billion consensus projection.

Chief Executive Amanda Blanc noted that the firm has swiftly enhanced Direct Line’s profitability, expanded sales through price comparison platforms, and preserved customer service quality.

The complete Direct Line workforce has been integrated. Approximately £5 billion in assets have been transferred to Aviva Investors.

Aviva has achieved £100 million in run-rate cost synergies, progressing toward its £225 million objective. The organization continues to target more than £350 million in capital synergies by the close of this year.

Wealth Division and Cash Flow Performance

Net inflows in the wealth management segment increased 32% to £7.6 billion. This strong showing contributed substantial momentum to overall results, complementing the insurance operations.

Cash remittances increased 47% to £1.5 billion. Aviva has set a target for cumulative remittances exceeding £7 billion during the 2026-2028 period.

The Solvency II shareholder cover ratio registered at 176%, positioned near the upper boundary of its operating range. Management anticipates this metric will reach the high 180s by year-end, contingent on market dynamics.

IFRS return on equity strengthened to 20.3% from 18.2%, achieving the company’s objective of maintaining above 20%.

Shareholder Returns and Forward Guidance

Aviva increased its half-year dividend by 7% to 14 pence per share.

The insurer reaffirmed its three-year strategic targets: achieving 11% operating EPS growth, sustaining IFRS return on equity above 20% by 2028, and generating cumulative cash remittances exceeding £7 billion.

Aviva currently projects that 2026 operating EPS growth will align closely with its 11% target.

Additional cash remittances of approximately £0.8 billion are anticipated during the second half of the current year.

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