Aviva, the UK-based insurer, surpassed profitability projections for the first half, thanks to an increase in general insurance premiums in the UK and Ireland. On Wednesday, the company, which also has significant operations in Canada and Ireland, maintained a positive outlook regarding meeting its goals for 2026. The company recorded a 14% boost in operating profit, which reached £875 million, outperforming the predicted average of £830 million.
There was a general increase of 15% in insurance premiums, with an 18% jump in the UK and Ireland, specifically. Having set three-year objectives last year, Aviva aims to reach an annual operating profit of £2 billion by 2026.
Despite facing criticism for elevated premiums for car and home insurance, insurers attribute this to inflation and supply chain complications brought on by the Covid-19 pandemic and the Ukraine conflict, along with damages due to weather incidents which have further strained pricing for home insurance.
CEO Amanda Blanc defended the competitiveness of the car insurance market during a press conference, dismissing allegations of industry exploitation. Sales in retirement products, however, fell by 6% to £3 billion due to decreased sales in equity release mortgages and corporate pension scheme insurance, known as bulk annuities.
Aviva plans to stay open to “targeted M&A”, demonstrated by recent acquisitions like AIG’s UK life insurance division. Blanc also announced the impending launch of a long-term fund for unlisted equity in the latter part of the year.
Aviva is a part of Britain’s “Mansion House Compact”, where insurers and pension funds voluntarily pledge to invest a minimum of 5% of their defined contribution pension funds into unlisted firms by 2030.
Despite the company’s progress, Aviva shares saw a slight drop of 0.3% in early trading, contrasting with the FTSE 100’s 0.5% rise. In line with estimations, Aviva announced a 7% increase in their interim dividend to 11.9 pence per share.