Aviva Exceeds Targets 1 Year Early, Shares Slide

Aviva plc (LON: AV.) shares declined on Thursday morning after it announced a stellar 2025 performance, achieving its 2026 financial targets a year early.

Shares are currently down around 2.2% from Wednesday’s close.

The insurance giant reported a 25% surge in operating profit to £2.203 billion, up from £1.767 billion in 2024. Operating earnings per share climbed 17% to 56.0p, and IFRS return on equity reached 17.5%, a notable increase from 15.7% the previous year.

Cash remittances also saw a 4% rise, reaching £2.077 billion. IFRS profit for the year jumped 50% to £1.054 billion. The company also declared a 10% increase in the total dividend per share to 39.3p and announced a £350 million share buyback program.

Despite the strong numbers, Aviva’s share price experienced a dip following the announcement. This could be attributed to a number of factors, including profit-taking after a period of strong performance, or concerns about the sustainability of such high growth rates. The Solvency II shareholder cover ratio decreased from 203% to 180%, although the company stated this was in line with previous guidance.

Aviva’s General Insurance business saw premiums grow by 18% to £14.145 billion. The UK & Ireland segment experienced a significant 27% increase in premiums. The Wealth division also performed well, with net flows up 6% to £10.9 billion and Assets Under Management (AUM) growing 18% to £234 billion.

Driver Breakdown:

• General Insurance Growth: Significant premium increases in the UK & Ireland, driven by the acquisition of Direct Line and growth in Intermediated.
• Wealth Management Strength: Continued momentum in Workplace and Platform segments, leading to increased net flows and AUM.
• Capital-Light Focus: 68% of the Group’s operating profit now comes from capital-light businesses, enhancing profitability and returns.

Amanda Blanc, Group Chief Executive Officer, said: “Aviva delivered an outstanding performance in 2025, our fifth consecutive year of strong, profitable growth… We are highly committed to growing our dividend and today we are announcing a final dividend of 26.2 pence per share, an increase of 10%, and we are commencing a £350 million buyback.”

Looking ahead, Aviva has set ambitious new three-year targets, including operating EPS of 11% CAGR (2025-2028), IFRS RoE >20% (by 2028), and cash remittances of >£7 billion (2026-2028 cumulative). For 2026, the company expects continued growth momentum, particularly in General Insurance and Wealth.