Aviva PLC (LSE:AV.) reported a strong first-half performance, with operating profit climbing 24% to £1.33 billion as its insurance operations expanded and the integration of Direct Line continued to advance. The insurer also increased its interim dividend by 7%. Operating earnings per share increased 10% to 31.8p, while IFRS return on equity improved to 20.3% from 18.2%. Cash remittances surged 47% to £1.50 billion, and Aviva lifted its interim dividend to 14.0p per share from 13.1p.
However, IFRS profit for the period declined to £418 million from £819 million. The reduction reflected adverse investment variances alongside integration expenses, restructuring charges and other non-operating costs.
General Insurance delivers strong profit growth
General Insurance was a major contributor to the improved performance, with operating profit rising to £905 million from £648 million. Within the division, UK and Ireland operating profit jumped 50% to £643 million.
Gross written premiums across the UK and Ireland increased 42% on a constant-currency basis to £5.91 billion, helped by the addition of Direct Line. UK personal lines premiums nearly doubled to £3.68 billion, while the undiscounted combined operating ratio strengthened to 93.4%.
Aviva’s Wealth business also gained momentum during the period. Net flows increased 32% to £7.6 billion, while assets under management reached £261 billion.
Direct Line integration moves forward
Aviva reported further progress with the integration of Direct Line, with all employees from the acquired business now transferred into the wider group. Almost £5 billion of assets have also been moved to Aviva Investors.
The company has so far achieved £100 million of annualised cost synergies as it works towards its £225 million target. It also remains on course to generate more than £350 million of capital synergies by the end of the year.
Looking ahead, Aviva expects operating EPS growth in 2026 to be broadly consistent with its 11% target rate. The insurer also remains on track to meet its 2028 objectives, including an IFRS return on equity of more than 20% and cumulative cash remittances exceeding £7 billion between 2026 and 2028.
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