Aviva plc ticked the right boxes for the City today, with its latest numbers applauded by a trio of analysts.
Jefferies said the operating profit of £875m was 5% ahead of consensus (£830m), largely driven by strong performance in UK GI and Retirement.
Solvency II operating Own Funds Generation of £758m was 8% ahead of consensus (£700m), which has supported a strong Solvency II ratio (205%), also ahead of consensus (199%).
Aviva has reiterated its 2026 targets, as well as its guidance on capital returns.
“In our view, Aviva remains the only UK insurer that can reliably deliver long-term special capital returns, accretive M&A, attractive ordinary dividend growth, and consistent EPS growth,” said the bank, which has a 'buy' rating and a 525p price target.
UBS also noted that the solvency ratio of 205% was 6 percentage points ahead of consensus, which includes a 4 percentage point impact from Solvency UK reform, while cash remittances were 13% ahead of consensus expectations.
Guidance on the mix of the £2bn operating profit target was provided, with 70% being capital-light, up from approximately 55% at the last full-year update.
UBS said the reaction should be positive, given the headline beats to consensus expectations.
Panmure Liberum (Buy, TP 543p) said the highlights included top-line growth across the general insurance business of 14% year-on-year to £6bn (1H23: £5.3bn), or 4% ahead of consensus estimates.
The margins in general insurance are decent, with an undiscounted combined ratio of 95.4% (1H23: 94.8), 10 basis points better than consensus, with recent price increases earning through. Management expects further margin improvement over the second half as the recent price increases continue to earn through.
Management expects continued growth at decent margins over the second half, and we believe this can continue into the first half of 2025.
There is also a new venture and capital launch to expand into private markets for pension clients.
Shares were flat at 487.6p.