Aviva shares pass pre-financial crisis high on H1 earnings beat

By Ryan Hewlett

Aug 14 - (The Insurer) - Aviva's share price reached its highest level since December 2007 on Thursday as investors reacted to the London-listed insurer's consensus-beating first-half results.

The stock climbed by 4% to 691.80 pence in morning trading, reaching a new 2025 high and taking Aviva's year-to-date gain to more than 45%.

Aviva's first-half results included a 22% increase in operating profit to 1.07 billion pounds ($1.45 billion), driven in part by the ongoing integration of Direct Line.

The Amanda Blanc-led insurer’s general insurance unit posted gross written premiums of 6.29 billion pounds for the six months ended June 30, up 7% year on year. The firm said the result was driven by strong growth in UK commercial lines and its personal lines book in Ireland.

The insurer also said it remained confident in meeting the medium-term financial targets set out last year, which includes posting a full-year operating profit of 2.0 billion pounds and Solvency II own funds generation of 1.8 billion pounds by 2026.

Jefferies analyst Philip Kett said in a note that Aviva’s H1 operating profit was 10% ahead of consensus expectations, while the interim dividend lift of 10% was 2% ahead of consensus.

“Moreover, we are particularly pleased to find that Aviva's management has provided an update on Direct Line, where motor premiums have remained flat (despite industry-wide pricing pressure),” Kett said.

“Intriguingly, the motor policy count is down 6% and non-motor is down 4%, which when combined with flat premiums, implies that prices have risen by a mid-single-digit level at a time when peers cut prices by that amount. In our view, this implies that Direct Line's re-underwriting has continued during this interim period between the deal announcement and completion. Even more pleasing is Direct Line's net insurance margin, which has risen by 7.6 (percentage points), to 9.4%.”