Aviva beats profit expectations as Direct Line and wealth management drive growth

[LONDON] British insurer Aviva beat first-half profit expectations on Friday (Aug 14) as its combination with motor insurer Direct Line and a booming wealth-management business drove earnings higher.

CEO Amanda Blanc has bet on scale in a competitive home market, with the Direct Line deal cementing Aviva as Britain’s largest multi-line insurer as it navigates political uncertainty and softening insurance pricing.

Aviva, which offers car, home and life insurance, posted operating profit of £1.33 billion (US$1.79 billion) for the six months to Jun 30, up 24 per cent from a year earlier and ahead of the £1.26 billion expected by analysts in a poll by the company.

The insurer also said it was well placed to meet three-year financial targets, which include 11 per cent compound annual growth in operating earnings per share through 2028 and a return on equity above 20 per cent.

General insurance gross written premiums climbed 29 per cent to £8.1 billion in the first half, against a consensus forecast of £7.8 billion. Net inflows in the wealth-management business, meanwhile, rose 32 per cent to £7.6 billion.

Aviva raised its interim dividend by 7 per cent to £0.14 a share. REUTERS