Aviva plc, the prominent British insurance and investment giant, has unveiled its financial results for 2024, showcasing excellent growth and operational momentum. According to the company, adjusted operating profit surged to £1.77 billion, representing a 20% increase compared to the previous year. Analysts had expected profits to reach around £1.71 billion, meaning Aviva has exceeded market predictions.
The impressive results stem from significant double-digit growth within Aviva’s general insurance segment, where gross written premiums rose by 14% to £12.2 billion. Amidst increasing inflation and natural disasters, Aviva's effective pricing strategies enhanced profitability. Commenting on this, Group CEO Amanda Blanc remarked, "2024 was an excellent year, right across Aviva. We made clear strategic progress and delivered another set of very good numbers, with higher sales, higher operating profit and a higher dividend."
Blanc, leading the company through transformative changes over the past four years, highlighted the continued commitment to enhancing customer services and diversifying product offers. Aviva currently caters to approximately 17 million customers across the UK, surpassing any other insurer, and constantly seeks to fulfill various customer needs to fuel its growth.
Aviva's strategic plan also includes the proposed acquisition of Direct Line, valued at £3.7 billion, which is on track and anticipated to amplify the company's growth, placing it firmly on the path to becoming predominantly capital-light. This acquisition is expected to contribute positively to operating profits, with potential earnings per share (EPS) growth. Blanc noted, "There is so much untapped potential for Aviva to go after and I have real confidence in our ability to unlocking this." This belief is coupled with strategic investments aimed at scaling operations across its three core markets: the UK, Ireland, and Canada.
Financial highlights also reveal the company's increasing shareholder returns, with Aviva announcing a 7% hike in its final dividend to 23.8p per share, culminating in total dividends of 35.7p for the year. The strong solvency position, with Solvency II cover ratio at 203%, reassures investors and stakeholders about the company's financial resilience.
Beyond general insurance, Aviva's wealth management sector also showcased positive results, seeing profits rise by 29%. This surge was facilitated by strategic enhancements and expansions within their wealth services, corroborated by the significant £200 billion assets managed, marking progress over the last two years.
Despite the successes, Aviva's Canadian operations reported challenges due to natural disasters, yielding significant damage which impacted annual profits. Reports indicated Canada faced its most considerable insured annual losses due to floods and wildfires, which contributed to reduced profits there. The Canadian general insurance premium growth was still strong, driven by pricing adequacy, but heavy losses do pose risks and highlight the unpredictable nature of the current climate.
Aviva’s continuous commitment to sustainability remains steadfast as it pursues net-zero ambitions by 2040, making it the first major insurer to set such goals. Blanc reiterated the company’s dedication, stating, "While we are working toward our sustainability ambitions, we recognize our operations are part of a much larger global system." Their commitment to sustainability is coupled with the realization of market challenges, as climate impacts are becoming more pronounced within the insurance industry.
The financial community responded positively to the results, with Aviva shares rising 1.9% to reach levels not seen since May 2018. This market confidence mirrors the company’s strong operational performance, which has become evident through consistently favorable financial results and strategic advancements.
Looking forward, Aviva remains optimistic about meeting its medium-term financial targets, which include generating £2 billion of adjusted operating profit by 2026 and achieving cumulative cash remittances exceeding £5.8 billion between 2024 and 2026. These ambitious goals, paired with the positive momentum carried forward from 2024, fortify the company’s stance as it ventures forward, undeterred by external challenges.
GDPR-controlled improvements, digital innovation including the introduction of new applications like MyAviva, and wise management strategies all reflect Aviva's readiness to adapt and grow, ensuring it remains competitive and responsive to market demands. The results represent not just figures and metrics, but the energy and commitment of the team dedicated to advancing customer service and operational excellence.
Aviva's growth narrative continues to be driven by its foundational values—prioritizing customers, ensuring financial strength, and embodying commitment to sustainability. With these principles as guiding lights, Aviva is well-positioned for the anticipated growth phases as it moves through 2025 and beyond.