Aviva PLC's (LSE:AV.) interim results on Wednesday 16 August will see investors and analysts zeroing in on the impact of Canadian wildfires, with analysts also not expecting a repeat of its share buyback.
The life and general insurance group flagged that an immaterial impact was expected for the first half of the year, but UBS noted that fires have continued to cause damage including in provinces such as Ontario, where Aviva has a top-three position in both commercial and personal lines general insurance.
Canada has seen widespread record-breaking fires, as part of significant wildfire activity in the Northern Hemisphere since the beginning of May.
"On the positive side, value-accretive M&A in line with Aviva's strategy might be taken positively," analysts at the Swiss bank said, while the motor insurance industry is also going through a period of record prices and higher costs.
Aviva reported in June that it had completed its £300 million buyback but the analysts do not expect a new announcement at the half-year stage.
UBS forecasts a 201% Solvency II ratio, with a combined operating ratio (COR) of 95.9% on an undiscounted basis.
These results will be the first reported under IFRS 17 and IFRS 9 accounting principles, which aim to bring more consistency to life insurance profits by spreading earnings over the contract period.
The FTSE 100 group said it would have no impact on strategy, capital generation, dividend guidance or capital return outlook, even though the preliminary figures showed a 13% decline in shareholder equity, a 39% drop in operating profits before adjustments and a 15% decline in earnings after restatements.
Guidance for half-year operating profit is circa £700 million, marking a 6% increase from the restated £661 million in the first half of 2022.
UBS expects £653 million and an interim dividend of 10.9p is forecast.