Aviva’s General Insurance premiums rose 18% to £14.1bn in 2025, including 27% growth in UK & Ireland supported by the inclusion of Direct Line. Wealth net flows increased 6% to £10.9bn, Health in-force premiums rose 12% to £1.1bn, and Retirement sales fell 30% to £6.6bn.
Aviva reported full-year operating profit of £2.2bn (in line with guidance), up 25% year-on-year.
The Solvency II shareholder cover ratio, a measure of balance sheet strength, fell from 203% to 180% following the Direct Line acquisition. Savings of over £350mn are expected by the end of 2026, which would improve the ratio by over 7 percentage points.
The final dividend was increased by 10%, taking the total dividend for the year to 39.3p. Aviva also announced the launch of a new £350mn share buyback programme.
New medium-term targets include 11% annualised growth in operating earnings per share through 2025–28.
The shares fell 1.9% in early trading.
Our view
Having achieved the 2026 targets a year early, Aviva has set new, challenging, medium-term aspirations. We like the confidence and the focus on capital-light growth from insurance and wealth. If achieved, the 11% annualised profit growth would be a step up from current expectations.
Aviva brings insurance, wealth, and retirement under one roof, and the acquisition of Direct Line has bolstered its market-leading positions in key areas, like UK motor and home insurance. The deal required a decent chunk of cash, so Aviva has tapped into its surplus capital. It meant no buybacks for 2025, but they are back on the cards for 2026, albeit never guaranteed.
General insurance in the UK & Ireland had a strong year. New business is moving in the right direction, suggesting Aviva’s got its price point right. 2026 will be tougher, but with prices held ahead of the market, that should help keep margins at a decent level. There’s also a large Canadian business that improved last year, though profitability there hasn’t been quite as strong.
Aviva's bulk annuity business (BPA), where it takes on final salary commitments from pension funds, has been in focus. Finding the right new business rather than pushing for market share has been key. These contracts feed significant quantities of new assets into the business, which Aviva Investors can manage - increasing scale and profitability. Deal volumes are down from the elevated levels of 2024, but we support the focus on margins over scale.
Being a huge workplace pension provider is the logic behind increasing its presence in the wealth management market. Plans are also underway to expand the advisory offering, which will help increase exposure to capital-light businesses. Performance has been decent, but it’s a tough market.
The retirement products sit alongside Aviva’s protection business, which includes products such as life assurance and income protection policies. It also houses the Health business, which has been a benefactor of increased demand for private health insurance, a trend we see continuing. But there have been mentions of affordability headwinds, which is something to monitor.
We think Aviva is a top-class outfit, with fingers in basically all the right pies. The balance sheet is still strong, momentum looks good, and the 6.3% yield looks attractive - though never guaranteed. However, momentum means the valuation isn’t as attractive as it has been, and there are some softer market signals to think about for 2026.
Environmental, social and governance (ESG) risk
The financials sector is medium-risk in terms of ESG. Product governance is the largest risk for most companies, especially those in the US and Europe with enhanced regulatory scrutiny. Data privacy and security are also an increasingly important risk for banks and diversified financial firms. Business ethics, ESG integration and labour relations are also worth monitoring.
According to Sustainalytics, Aviva’s overall management of material ESG issues is strong.
Aviva values ESG management and focuses on transparency around key issues. The company actively addresses physical climate risks, data privacy, security, and sustainable finance. Aviva aims to boost sustainable investments by 2025 and integrates ESG factors into its investment strategies. The absence of customer satisfaction targets in FY2022 is a potential area for improvement.
A director of Hargreaves Lansdown Group Limited is a Non-Executive Director at Aviva.
Aviva key facts
All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.