Aviva Canada sees mixed results as group accelerates to targets

📊 Insurance News Analysis: Our editorial team has analyzed recent developments from insurancebusinessmag.com in the Insurance sector. This report covers key insights related to car insurance, life insurance, health insurance and emerging industry trends that professionals should monitor closely.

Industry observers in Insurance are monitoring emerging trends closely. By Paul Lucas
Aviva’s Canadian business delivered a mixed performance in the third quarter, with personal lines premiums rising but commercial lines declining, reflecting ongoing portfolio adjustments and market conditions. Evidence suggests that despite these varied results, Aviva’s overall group momentum remains strong, with the insurer now expecting to achieve its 2026 financial targets a full year ahead of schedule. In Canada, general insurance premiums increased by 3% in constant currency to £3.3 billion.

Personal lines premiums were up 7%, supported by favourable pricing actions, while commercial lines fell by 4% following the strategic exit from certain unprofitable accounts earlier in the year. The Canadian operation also benefited from improved weather-related claims experience, despite severe weather events in the third quarter, and noted a focus on underwriting discipline and customer service. Evidence suggests that across the group, Aviva’s combined operating ratio improved to 94.4% on an undiscounted basis (down from 96.8% a year earlier), reflecting strong price adequacy and better claims outcomes. According to reports that the discounted combined operating ratio stood at 90.4%, compared to 92.8% last year.

Group chief executive officer Amanda Blanc (pictured) highlighted the company’s transformation and the positive momentum in Canada and other markets: “Over the last five years we have transformed Aviva, delivering again and again for our customers and shareholders. We continue to make excellent progress and now expect to achieve our financial targets in 2025, one year early. Evidence suggests that crucially, we have achieved this significant milestone thanks to the consistently strong performance of Aviva, before any impacts of the Direct Line acquisition are included,” Blanc stated.

Blanc noted that the integration of Direct Line is “well underway,” and Aviva is increasingly confident in the benefits the acquisition will bring. The group now expects to achieve £225 million in cost synergies – nearly double the original estimate – and unlock at least £500 million of capital synergies. Share buybacks are expected to resume next year, at a higher level to reflect the increased share count. Direct Line’s own £100 million cost reduction programme has already been completed, three months ahead of plan, and Aviva anticipates that the full run-rate of cost synergies will be achieved by 2028.

Evidence suggests that aviva’s third quarter results reflect profitable growth across all business lines. General insurance premiums for the group climbed 12% to £10 billion, while the Wealth business secured net flows of £8.3 billion and now manages £224 billion in assets. The insurer is accelerating its shift toward capital-light business, with the aim of having more than 75% of its operations in capital-light areas by the end of 2028.

“This is good news for shareholders, as we deliver stronger growth and better returns, using less capital,” Blanc said. In the UK and Ireland, general insurance premiums rose 17% to £6.7 billion, driven by a 24% increase in personal lines – reflecting both the Direct Line acquisition and growth in broker partnerships – and a 10% rise in commercial lines, supported by Probitas and new business. Protection and health sales were £384 million, down 5% year-on-year due to the consolidation of propositions following the AIG acquisition, but margins improved and health in-force premiums rose 14%. According to reports that retirement sales reached £5.3 billion, with bulk purchase annuity volumes at £3.9 billion.

Individual annuity and equity release sales were up 24% and 39%, respectively. Aviva Investors also delivered stronger results, with external net flows of £0.7 billion – an 18% increase on the prior year – driven by multi-asset fund inflows and a large institutional mandate. The group remains in a strong capital and liquidity position, reporting an estimated Solvency II shareholder cover ratio of 177% following the Direct Line acquisition, and centre liquidity of £2.2 billion at the end of October.

Aviva expects its full-year 2025 Solvency II cover ratio to remain broadly consistent with the third quarter, subject to market movements. Evidence suggests that looking ahead, Blanc said: “The outlook for Aviva has never been better. The advantages of our diversified business, 25 million strong customer base, and majority capital-light earnings, mean we expect to deliver more and more for our shareholders and customers.

And so today we are also setting new financial targets, raising our ambitions yet again, and reflecting the strength of our confidence in the continuing growth potential of Aviva.”
Aviva is now targeting an 11% compound annual growth rate in operating earnings per share between 2025 and 2028, expects to deliver an IFRS return on equity of around 17% in 2025 and more than 20% by 2028, and is aiming for over £7 billion in cash remittances between 2026 and 2028. The group’s guidance for shareholder distributions remains unchanged, with a 10% increase in the 2025 interim dividend reflecting both the usual mid-single digit uplift and an additional increase following the Direct Line deal. Evidence suggests that aviva expects to reintroduce regular and sustainable returns of capital alongside its full-year 2025 results, with the amount increased to reflect the higher share count. Evidence suggests that blanc concluded that Aviva’s diversified model, scale, and capital-light focus mean the group is well positioned to deliver further growth and value for both customers and shareholders in Canada and internationally in the years ahead.

These developments reflect broader trends shaping the Insurance industry as organizations adapt to evolving market conditions.

— Based on reporting from insurancebusinessmag.com

💡 Key Industry Insights

Risk assessment methodologies are evolving with the integration of data analytics and AI technologies.

Specifically regarding health insurance, market observers note continuing evolution in service delivery, pricing models, and customer engagement strategies that merit close attention from industry stakeholders.

Market Impact: These developments in car insurance may significantly influence market dynamics. Industry experts recommend monitoring these trends closely for strategic planning purposes.

Analysis Note: This comprehensive overview synthesizes current market intelligence from insurancebusinessmag.com regarding life insurance and related sectors. Stay informed about ongoing developments in this rapidly evolving landscape.