Aviva PLC (LSE:AV.) reported a strong first half and confirmed the integration of Direct Line, a deal completed last month, is “moving at pace.”
Adjusted operating profit rose 22% to £1,068 million as the insurer announced a 10% increase in its interim dividend to 13.1p per share.
Chief executive Amanda Blanc said: “Aviva’s performance in the first half of 2025 was outstanding, growing operating profit by 22% and extending our track record of delivery.”
Aviva’s Solvency II shareholder cover ratio, a key gauge of regulatory capital strength, edged up to 206% from 203% at year-end 2024, underlining a robust balance sheet. In simple terms, the higher the ratio, the larger the capital cushion above regulatory requirements.
General insurance did much of the heavy lifting. Gross written premiums rose 7% to £6,290 million and the undiscounted combined operating ratio improved to 94.6% from 95.4%.
A ratio below 100% indicates underwriting profits after claims and costs. Within that, UK and Ireland operating profit jumped 50% to £430 million, while Canada delivered a 7% increase.
Management continues to tilt the group toward “capital-light” businesses (those that generate earnings without tying up large amounts of regulatory capital).
Aviva said 66% of operating profit now comes from capital-light areas and expects that to exceed 70% as synergies from Direct Line flow.
Wealth remained a bright spot. Net flows rose 16% to £5.8 billion, helping lift assets under management to £209 billion.
Health in-force premiums climbed 14% to £1.0 billion, reflecting demand for private medical cover. By contrast, Retirement sales softened 3% to £2,946 million amid a quieter bulk purchase annuity market, with Aviva reiterating it will prioritise margins over volume.
Direct Line’s first-half figures are not consolidated into Aviva’s numbers, but Aviva reiterated earlier guidance that the deal should deliver around 10% run-rate earnings per share accretion.
The combined UK franchise now serves more than 21 million customers, about four in ten adults, with further detail promised at a November “In Focus” event.
Cash generation also strengthened. Solvency II operating capital generation rose 33% to £957 million, cash remittances increased 7% to £1,022 million, and centre liquidity stood at £2.1 billion at end-July.
The group flagged that regular capital returns should resume alongside full-year 2025 results, aligned to its capital framework.
Aviva’s leverage ticked up to 32.3% after recent subordinated issuance, partly offset by the cancellation of preference shares.
The company kept its medium-term targets of £2 billion operating profit and £1.8 billion Solvency II operating own funds generation by 2026 unchanged.