Aviva shares were marginally down on Wednesday despite the insurer and retirement firm beating expectations in the first half of 2024.
The group’s efforts to offer the full suite of insurance, wealth and retirement needs are paying off. Sales increased 12% in the first half of the year, and investors will be delighted to see operating profit increase by 14% in the period.
Aviva’s already generous dividend continues to climb, further solidifying the company’s attributes as an income pillar of many portfolios.
“Sales are up. Operating profit is up. The dividend is up. Our plan to deliver more for customers and shareholders is working really well,” said Amanda Blanc, Aviva’s Group Chief Executive Officer.
“We have achieved another six months of excellent trading. We have generated growth right across Aviva, thanks to our leading positions in attractive markets such as workplace pensions and general insurance in the UK and Canada.”
Aviva is the number one provider of workplace pensions, and the affinity this has built with its brand has helped the group excel in other areas of its business.
“Aviva has beaten analysts’ profit estimates, helped by insurance premiums rising 18% in the UK and Ireland,” said Adam Vettese, Market Analyst at investment platform eToro.
“This won’t be too much of a surprise given the inflationary environment we have been in. The insurer’s cash position is strong and has also nudged up the dividend after completing a £300m share buyback. Given topical concerns over volatility and macro factors perhaps injecting some uncertainty back into the market, Aviva seems like a pretty solid place for investors to shelter from such conditions with shares up 13% so far this year.
“Aviva is looking to achieve £2bn operating profit by 2026 which could be a punchy target if premium growth starts to level off. Investors may then look to the retirement sales numbers which came in lower than last year to rebound in order to pick up the slack.”