Company Reports

For the first half of 2026, Aviva has delivered a broadly in-line set of numbers versus the company-compiled consensus. Bottom-line earnings are ahead of our full-year estimates, yet that is predominantly due to a light tax impact.

With the divestment of peripheral operations and geographies, Aviva has tilted its portfolio to a regional focus and a more balanced portfolio across product lines. International growth took the company increasingly away from general insurance. This is back to the levels of contribution seen historically and should grow further with the acquisition of Direct Line. Aviva has transformed its business toward capital-light and technical risk operations. Health insurance is increasingly important, serving over 4.5 million retail customers and around 3.3 million customers who get health insurance through their employment. With elevated national health service waiting lists, there is increasing demand for health insurance. In protection, the company’s products are split equally between individual and group insurance. Using individual protection as a benchmark, 10% of sales are direct, 10% are sold without advice but intermediated, and protection sales are heavily intermediated. Aviva is looking to make individual protection increasingly automated. Health and protection make up around 10% of operating profit from UK and Ireland life and savings.

Aviva's first-quarter trading update showed a business that struggled a bit in the insurance, wealth, and retirement division, in particular in retirement, protection, and health. That weaker performance is overshadowing positive Aviva Investors net flows.

We have rolled our model for Aviva to incorporate the latest figures for full-year 2025, and in doing so we have revised our estimates.

With the divestment of peripheral operations and geographies, Aviva has tilted its portfolio to a regional focus and a more balanced portfolio across product lines. International growth took the company increasingly away from general insurance. This is back to levels of contribution seen historically and should grow further with the Direct Line acquisition. Aviva has transformed its business toward capital-light and technical risk operations. Health insurance is increasingly important, serving over 4.5 million retail customers and around 3.3 million customers who get health insurance through their employment. With elevated national health service waiting lists, there is increasing demand for health insurance. In protection, the company’s products are split equally between individual and group insurance. Using individual protection as a benchmark, 10% of sales are direct, 10% are sold without advice but intermediated, and protection sales are heavily intermediated. Aviva is looking to make individual protection increasingly automated. Health and protection make up around 10% of operating profit from UK and Ireland life and savings.

With earnings and balance sheet weakness, a lot of negatives can be pulled out of Aviva's results. But fundamentally, operating profit is ahead of target, one year early, even if we exclude operating profit from Direct Line. Solvency and liquidity are most likely dragging down shares.

With the divestment of peripheral operations and geographies, Aviva has tilted its portfolio to a regional focus and more balance across product lines. International growth took the company increasingly away from general insurance. This is back to levels of contribution seen historically and should grow further with the Direct Line acquisition. Aviva is still a life and savings business, predominantly generating close to three-quarters of its earnings from protection and health, equity release, annuities, and long-term savings products. Health insurance is increasingly important, serving 4.5 million retail customers and around 3.3 million customers who get health insurance through their employment. With elevated national health service waiting lists, there is increasing demand for health insurance. In protection, the company’s products are split equally between individual and group insurance. Using individual protection as a benchmark, 10% of sales are direct, 10% are sold without advice but intermediated, and protection sales are heavily intermediated. Aviva is looking to make individual protection increasingly automated. Health and protection make up around 10% of operating profit from UK and Ireland life and savings.

While Aviva's share have fallen Nov. 13, we think the trading update brings good news on both the operating profit outlook and the integration of Direct Line.

For first-half 2025 Aviva delivered GBP 1.068 billion in group adjusted operating profit. That marks a good half-way point versus the company's GBP 2 billion target. Cash remittances are up 7% to GBP 1.022 billion, and Aviva operates with a GBP 5.4 billion cumulative target.

On July 1, 2025, the Competition and Markets Authority cleared the acquisition by Aviva of Direct Line. This makes the scheme of arrangement effective and marks the start of the physical acquisition and integration of Direct Line.

In our look into European dividends for companies and stocks we prefer for 2025 earnings, we like Admiral, Munich, and Scor, but we prefer Scor over Munich based on its price/fair value ratio. We also think there is potential in Ageas.

With the divestment of peripheral operations and geographies, Aviva has tilted its portfolio to a regional focus and more balance across product lines. International growth took the company increasingly away from general insurance. This is back to levels of contribution seen historically and should grow further with the Direct Line acquisition. Aviva is still a life and savings business, predominantly generating close to three-quarters of its earnings from protection and health, equity release, annuities, and long-term savings. Health insurance is increasingly important, serving 4.5 million retail customers and around 3.3 million customers who get health insurance through their employment. With elevated national health service waiting lists, there is increasing demand for health insurance. In protection, the company’s products are split equally between individual and group insurance. Using individual protection as a benchmark, 10% of sales are direct, 10% are sold without advice but intermediated, and protection sales are heavily intermediated. Aviva is looking to make individual protection increasingly automated. Health and protection make up around 10% of operating profit from UK and Ireland life and savings.

In a trading update for the first three months of the year, Aviva's numbers are broadly better than they were last year in nearly all divisions other than nonlife underwriting and in wealth.

With the divestment of peripheral operations and geographies, Aviva has tilted its portfolio to a regional focus and more balance across product lines. International growth took the company increasingly away from general insurance. This is back to levels of contribution seen historically and should grow further with the Direct Line acquisition. Aviva is still a life and savings business predominantly, generating close to three quarters of its earnings from protection and health, equity release, annuities, and long-term savings. Health insurance is increasingly important, serving 4.5 million retail customers and around 3.3 million customers who get health insurance through their employment. With elevated national health service waitlists, there is increasing demand for health insurance. In protection, the company’s products are split equally between individual and group insurance. Using individual protection as a benchmark, 10% of sales are direct, 10% are sold without advice but intermediated, and protection sales are heavily intermediated. Aviva is looking to make individual protection increasingly automated. Health and protection makes up around 10% of operating profit from UK and Ireland life and savings.

While Direct Line is still losing customers, its results for 2024 have been driven by better pricing and lower claims. Our estimate was the company would deliver profit before tax of GBP 273.8 million and the business has delivered slightly less than this at GBP 218.4 million for the year.

Over the course of 2024 Aviva delivered good growth in the business. However, this has translated poorly to the bottom line. This is due to nonoperating features, and the bottom-line earnings outlook is better for 2025.

Following the story of a potential acquisition of Direct Line, Aviva has officially announced a cash and share offer that consists of 0.2867 new Aviva shares, GBX 129.7 in cash per Direct Line share, GBX 5 in the form of a dividend to be paid to Direct Line shareholders.

Aviva and Direct Line have jointly announced they have a preliminary agreement on the financial terms for Aviva's acquisition of Direct Line. These terms include a cash offer of GBX 129.7 per Direct Line share plus a stock offer of 0.2867 new Aviva shares, which at the GBX 489.3 per-share closing price for Aviva on Dec. 5, represents a stock offer for Direct Line of GBX 270 per share. The consideration has been sweetened by a GBX 5 per-share dividend to be paid to shareholders of Direct Line. That cash consideration is GBP 1.69 billion, stock consideration of GBP 1.82 billion, dividend consideration of GBP 65 million, for a total consideration of GBP 3.6 billion for Direct Line.

With no-moat Aviva's bid for Direct Line, we take a closer look at Aviva's personal lines. That's relevant because resistance to a takeover is increasingly looking like a bet that the latter firm's CEO, Adam Winslow, can deliver a long-term turnaround. Investors should worry not just about whether the business can achieve its targets, but where that would leave it in the long term. Our fair value estimate is GBX 570 per share; shares are undervalued at current levels.

With the divestment of peripheral operations and geographies, Aviva has tilted its portfolio to a regional focus and more balance across product lines. International growth took the company increasingly away from general insurance. This is back to levels of contribution seen historically. Aviva is still a life and savings business predominantly, generating close to three quarters of its earnings from protection and health, equity release, annuities, and long-term savings. Health insurance is increasingly important, serving 4.5 million retail customers and around 3.3 million customers who get health insurance through their employment. With elevated national health service waitlists, there is increasing demand for health insurance. In protection, the company’s products are split equally between individual and group insurance. Using individual protection as a benchmark, 10% of sales are direct, 10% are sold without advice but intermediated, and protection sales are heavily intermediated. Aviva is looking to make individual protection increasingly automated. Health and protection makes up around 10% of operating profit from UK and Ireland life and savings.