Aviva delivered a strong third quarter, with its general insurance and wealth arms driving growth and the insurer reaffirming its three-year financial targets.
The update was well-received, and Aviva shares rose 2% in early trading.
General insurance premiums rose 19% to £11.8bn, with UK and Ireland up 27%, driven by the acquisition of Direct Line and a home-insurance tie-up with Nationwide; on a like-for-like basis, UK personal-lines premiums grew a more modest 5% in the quarter.
Underwriting profitability improved, with the group combined operating ratio strengthening to 93.8% from 94.4%. That came despite two weather-related drags: catastrophe claims in Canada, and rising subsidence claims in the UK after an unusually dry summer, a reminder that the same record sunshine that boosted pubs and retailers lands as a cost for insurers.
Another key component of Aviva’s growth was the Wealth unit. Net inflows jumped 31% to £10.9bn and assets under management reached £267bn, with customer numbers now above six million.
Chris Beauchamp, Chief Market Analyst UK at investing and trading platform IG: “The strong trading in its wealth division provides another string to Aviva’s bow, and has played a big part in the rally in the shares to new post-financial crisis highs.”
“While we’re all used to thinking of Aviva as an insurer, it is growth in wealth management that offers the real potential for the future. With tech stocks looking wobbly again, Aviva’s combination of dividend and share price growth is a compelling proposition.”
Retirement showed some weakness, with bulk annuity volumes halving to £1.9bn amid stiff competition, dragging new retirement business down 55%, though year-to-date bulk annuity volumes remain ahead of last year. Health sales fell 31% as the market slowed.