Aviva plc reported an increase in general insurance premiums and maintained its Solvency II ratio in its Q1 2025 trading update, supported by gains across multiple business lines and ongoing cost discipline.
Group general insurance premiums rose 9% to £2.9 billion compared to £2.7 billion in Q1 2024. UK and Ireland general insurance premiums were up 12% to £2.0 billion, with 8% growth in personal lines and a 15% rise in commercial lines.
The insurer cited both new business momentum and the integration of Probitas as contributing factors. In Canada, premiums remained steady at £0.9 billion, though on a constant currency basis, there was a 5% increase.
Personal lines in Canada were also up 10% due to pricing actions, while commercial lines were 2% lower, reflecting an emphasis on margin over volume.
The group’s undiscounted combined operating ratio (COR) increased to 96.6% from 95.8% in Q1 2024. While underlying COR improved as pricing actions continued to earn through, this was offset by elevated catastrophe activity, including losses from Storm Eowyn. The discounted COR was reported at 92.9%, compared to 92.0% a year earlier.
Comparatively, Aviva noted that it beat analyst expectations in its 2024 results, reporting a group adjusted operating profit before tax of £1.77 billion for the full year 2024, a 20% increase from £1.47 billion in 2023. Forecasts had Aviva at an average of £1.67 billion.
Wealth net flows reached £2.3 billion, representing 5% of opening assets under management (AUM), compared to £2.7 billion a year earlier. This was attributed to the outflow of assets linked to a large workplace scheme that transitioned to a new provider in 2023.
As of the end of April, net flows had risen to £4.0 billion, representing 6% of opening AUM, supported by the onboarding of another workplace scheme.
Sales in the retirement segment were up 4% to £1.8 billion, driven by higher volumes in individual annuities and equity release. Bulk purchase annuity volumes held steady at £1.3 billion. The retirement margin improved to 3.6%, up from 2.9% in Q1 2024, with a continued focus on pricing discipline.
Protection and health sales increased by 19% to £126 million, following the completion of the acquisition from AIG in April 2024. Health in-force premiums rose by 11%.
The Solvency II shareholder cover ratio remained strong at 201%, compared with 203% at year-end 2024. The decrease reflected the final dividend payment, offset by operating capital generation and market movements.
Solvency II debt leverage rose to 31.9% from 28.9%, or 30.1% on a pro forma basis excluding preference shares. Centre liquidity stood at £1.8 billion in April, up from £1.7 billion in January, with cash ring-fenced for the Direct Line acquisition excluded.
Aviva said that it remains focused on transitioning towards a more capital-light model. As of Q1 2025, 56% of its operating profit is from capital-light businesses, and the integration of Direct Line is expected to raise this figure beyond 70%.
The group reiterated its financial targets presented in its 2023 full-year results: operating profit of £2 billion by 2026, Solvency II own funds generation of £1.8 billion by 2026, and cumulative cash remittances exceeding £5.8 billion between 2024 and 2026.
Group CEO Amanda Blanc (pictured) said Aviva had made a strong start to 2025, with profitable growth across the group and continued customer service delivery during a period of market volatility.
“We continue to be very positive about the outlook for 2025,” she said. “Our balance sheet is strong, we have a clear customer-focused strategy which we continue to deliver at pace and our market-leading businesses are growing well, especially in capital-light areas. We are increasingly confident about Aviva’s prospects and meeting our financial targets.”
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