British insurer Aviva beat first-half profit expectations following a rise in general insurance premiums in the UK and Ireland and said on Wednesday it remained confident of achieving its 2026 targets.
The life and general insurer, which focuses on the UK, Canada and Ireland, reported a 14 percent increase in operating profit to £875 million ($1.12 billion), above analysts’ average forecast of £830 million.
Overall, general insurance premiums increased by 15%, while in the UK and Ireland the increase was 18%.
Aviva set three-year targets last year, including achieving annual operating profits of £2 billion by 2026.
Insurers have come under fire for raising premiums for car and home insurance, blaming inflation and supply chain problems resulting from the COVID-19 pandemic and the war in Ukraine, with weather damage putting additional pressure on home insurance prices.
The motor insurance market is “extremely competitive and highly dynamic,” said CEO Amanda Blanc in a conference call with the media.
“I don’t think the industry can be accused of profiteering.”
However, Aviva’s pension revenues fell 6% to £3 billion due to a decline in capital release mortgages and the sale of lump sum annuities, i.e. insurance for occupational pension schemes.
Aviva said it would continue to explore “targeted mergers and acquisitions” following recent transactions such as the purchase of U.S. insurer AIG’s U.K. life insurance business AIG.N.
Blanc announced in the conference call that the insurer will launch a long-term asset fund for unlisted equities in the second half of the year.
Aviva is one of the signatories of the British “Mansion House Compact”, in which insurers and pension funds voluntarily commit to investing five percent of their defined contribution pension plans in unlisted companies by 2030.
Aviva shares were down 0.3 percent at 07:32 GMT, compared with a 0.5 percent rise in the FTSE 100.
The company announced it would pay an interim dividend of 11.9 pence per share, an increase of 7% and in line with forecasts.
(1 USD = 0.7796 pounds)
(Reporting by Carolyn Cohn, editing by Lawrence White and Mark Potter)
Topics
Trends Carrier Profit Loss Price Development
Interested in Freight forwarder?
Get automatic notifications about this topic.
