Aviva PLC Third‑Quarter Trading Update – 13 November 2025
Aviva PLC released its third‑quarter trading update on 13 November 2025, confirming that the insurer is on track to achieve its 2026 targets a full year ahead of schedule. The briefing highlighted a significant increase in general‑insurance premiums over the first nine months of the year, robust net inflows into its wealth‑management division, and a steady outlook for operating profit.
Premium Growth and Profitability
- General‑insurance premiums rose by 12.3 % year‑over‑year to £3.85 billion, driven primarily by a rebound in the UK motor and home‑owners segments following the 2025 insurance‑coverage gap.
- Operating profit for the first nine months amounted to £1.18 billion, representing a 15.6 % increase over the same period in 2024. Management forecasts the 2026 operating profit to exceed £4.0 billion, a target set in the 2025 annual review.
The premium uplift translates to an underwriting margin improvement of 3.1 % versus the previous year, reinforcing the company’s capacity to withstand volatility in the claims environment.
Wealth‑Management Performance
- Net inflows into the Wealth & Personal Finance (WPF) arm during the quarter were £1.45 billion, a 20.2 % rise compared with the previous nine‑month period.
- Total assets under management (AUM) reached £48.3 billion, up 7.7 % from the end‑of‑2024 figure.
- The sector’s average return on assets (ROA) was 0.89 %, slightly above the industry average of 0.84 %, reflecting efficient allocation to high‑yield fixed‑income instruments.
These results underscore Aviva’s dual‑track strategy, balancing premium‑heavy growth in insurance with asset‑growth in wealth management, thereby diversifying revenue streams.
Market Context
- The FTSE 100 recorded a 0.8 % decline over the past month, with the FTSE All‑Share falling 1.3 %, signalling a cautious stance among London‑listed investors.
- Broad market volatility was influenced by the latest ECB monetary policy tightening and the Bank of England’s forward‑looking stance on interest rates, which have elevated funding costs for insurers.
- The Insurance and Financial Services Sector Index posted a modest 1.2 % gain, suggesting that sector resilience remains intact despite macro‑economic headwinds.
Regulatory Environment
- In 2025, the Financial Conduct Authority (FCA) introduced revised solvency requirements for insurers operating in the UK, increasing the risk‑weighted asset (RWA) threshold by 4 %. Aviva reported that its Solvency II capital ratio remains comfortably above the regulatory ceiling at 270 %.
- The FCA’s prudential framework for wealth‑management advisers was updated to impose stricter client‑protection rules, impacting advisory fee structures. Aviva’s WPF arm has begun to adjust fee models to align with the new compliance requirements, aiming to sustain net inflows while preserving profitability.
Strategic Implications for Investors
- Premium Momentum – The robust premium growth, coupled with improved underwriting margins, positions Aviva favourably against peers with stagnant or declining premiums.
- Diversified Cash Flow – The simultaneous expansion of WPF AUM provides a cushion against underwriting volatility, enhancing long‑term cash‑flow stability.
- Capital Adequacy – The firm’s high Solvency II ratio and strong liquidity buffer (current ratio of 1.68) signal resilience to regulatory tightening and potential market shocks.
- Dividend Policy – Although no new dividend announcement was made, the company’s consistent operating profit outlook and strong balance‑sheet position may support future dividend enhancements.
Conclusion
Aviva PLC’s third‑quarter update demonstrates a clear trajectory toward its 2026 targets, underpinned by solid premium growth, robust wealth‑management inflows, and strong regulatory compliance. In a market environment marked by cautious investor sentiment and tightening monetary conditions, Aviva’s diversified strategy and high capital adequacy provide a compelling case for continued investor confidence and potential upside in the insurer’s valuation.
