Half Year 2026 Aviva PLC Earnings Call Transcript
Key Points
- Aviva PLC (AVVIY) delivered a strong first half of 2026 with operating profit up 24% and operating EPS growth of 10%, driven by robust performance across all business segments.
- The integration of Direct Line is progressing well, with cost synergies on track to reach £130 million this year, and the motor business has seen a significant improvement in combined ratios by more than 10 points.
- Wealth management continues to excel, with net flows up 32% to £7.6 billion, driven by strong growth in workplace, advisor platform, and direct wealth, positioning the company well to meet its 2027 profit ambition of £280 million.
- The company's capital-light strategy is advancing, with the portfolio now 70% capital light and on track to reach 75% by 2028, leading to higher returns and less capital deployment.
- Aviva PLC (AVVIY) is leveraging its scale and proprietary data to drive AI initiatives, including a virtual assistant and AI claims agent, which are expected to deliver significant efficiency and revenue benefits.
- The health insurance business is facing headwinds from slowing market growth, leading to a revised operating profit expectation of around £90 million for 2026, slightly below the £100 million target.
- Protection operating profit declined 14% due to adverse experience variances and increased investment in the business.
- The Canadian operations experienced higher-than-expected large losses in the first half, and recent weather events in Q3 are expected to push the company above its weather budget for the quarter.
- The bulk purchase annuity (BPA) market remains competitive and less active, with volumes lower than expected, although the company maintains pricing discipline.
- The company noted some margin compression in UK general insurance due to softer market conditions and the impact of integrating Direct Line, which has a lower margin profile.
Okay, good morning everyone and thank you for joining us today for our half-year results presentation. I'm going to start by sharing a few key highlights before Charlotte takes you through the results in more detail.
Then we'll cover why we are so confident in Aviva's long-term potential and as always we will open for questions.
So let me begin with the key messages.
Aviva has delivered another excellent performance in our first half of 2026, once again extending our track record of strong, profitable growth.
We continue to accelerate towards 75% capital light, unlocking the potential of Direct Line and building further momentum in our number one wealth business.
All of this underpins our confidence in delivering the ambitious three-year targets.
And our diversified model is a key enabler for long-term success, which is why I am equally confident in our ability to sustain strong earnings growth well beyond 2028. Now let's get to the results. As you can see, it's been a
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