- Record Operating Profit: Operating profit surged 25% to £2.2 billion in 2025, driven by strong performance across all segments.
- Dividend and Buyback Boost: Final dividend increased 10% to 26.2p/share, with a £350 million share buyback program reinstated.
- General Insurance Growth: Premiums rose 18%, nearing the sub-94% combined ratio target, with U.K. business already achieving it.
- Wealth Leadership: Assets under management hit £230 billion, with record net flows of £11 billion and a #1 market position expanded.
- AI and Capital-Light Strategy: New 3-year targets focus on AI-driven innovation, capital-light growth, and outperforming peers in General Insurance and Wealth.
Segmental Performance
In General Insurance, premiums were up 18%, and the company is approaching the sub 94% combined ratio ambition, already achieving this in the U.K. business. In Wealth, Aviva is extending its #1 position with over GBP 230 billion of assets and growing with record net flows of almost GBP 11 billion. The company's Protection business has improved margins and is nearing completion of the AIG Protection integration program.
Valuation Metrics
To understand what's priced into Aviva's stock, we can look at some key valuation metrics. The company's Price-to-Book Ratio (P/B) is 2.5, and Dividend Yield is 5.7%. These metrics suggest that the market is pricing in a certain level of profitability and dividend sustainability. Given the company's strong financial performance and increased dividend, the current valuation appears reasonable.
Outlook and Guidance
Aviva has raised its ambitions and set new 3-year targets across operating EPS, IFRS return on equity, and cash remittances. The company expects to deliver a 2026 combined ratio of better than 94% for the U.K. and Ireland business. With its diversified group model, scale, and pricing sophistication, Aviva is well-positioned to navigate the current market conditions and capitalize on opportunities in General Insurance, Wealth, and Retirement.
Investment Income and Capital Generation
The company's investment income is expected to be sustainable, and Aviva will continue to grow it from here. The company's capital generation is also expected to be strong, with distributable cash exceeding needs. As Charlotte Jones stated, "We're generating solvency above dividends and share buybacks, with distributable cash exceeding needs."
Conclusion on Financial Health
Aviva's financial health appears robust, with a pro forma solvency of around 180% and a holding company cash of GBP 1 billion. The company's leverage is not a binding constraint on distributable cash, and it is well-positioned to continue delivering strong financial performance and returning capital to shareholders.