Aviva Plc smashed expectations in its annual profit results amidst its landmark takeover of fellow insurer Direct Line.
The FTSE 100 giant posted a 20 per cent increase in operating profit to £1.77bn in 2024. The target surpassed Bloomberg analyst expectations of £1.71bn.
Shares in Aviva have returned 11 per cent so far this year, and are up over 50 per cent over the last five years.
Chief executive Amanda Blanc, who was instrumental in the firm’s £3.7bn deal with Direct Line, said the insurer was in “great shape” following results.
“We have clear trading momentum which is generating strong and reliable growth,” Blanc added.
Adam Vettese, market analyst at eToro, said: “Aviva’s latest results have beaten analyst expectations and has seen their growth momentum continue.
“Insurance premiums have been on the rise which many UK consumers can attest to from recent experience and this has ultimately helped Aviva’s bottom line.
“The rising cost of claims due to inflation hiking materials and labour costs, as well as severe weather events increasing the frequency and severity of claims, have given insurers the green light to raise their premium prices significantly.”
During Thursday’s results, Blanc said the acquisition with Direct Line remains “on track”.
The deal would forge the UK’s biggest motor insurer following regulatory approval.
The company said because of the proposed deal, it would continue to pause any share buybacks in 2025.
The takeover followed Blanc’s restructuring of Aviva’s operations, which included a series of divestments that slimmed down the insurer and redistributed its focus on the UK.
The move saw Aviva divest from France, Poland, Italy and Asia, and activist investor Cevian Capital AB selling its holding in 2023. Upon the sale, the activist said Blanc had done an “excellent job”.
Blanc had been awarded a damehood in 2024 for her contributions to business, gender equality, and net zero.