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1. Company Snapshot

1.a. Company Description

Aviva plc provides various insurance, retirement, investment, and savings products in the United Kingdom, Ireland, Canada, and internationally.The company offers life insurance, long-term health and accident insurance, savings, pension, and annuity products, as well as pension fund business and lifetime mortgage products.It also provides insurance cover to individuals, small and medium-sized businesses for risks associated with motor vehicles and medical expenses, as well as property and liability, such as employers' and professional indemnity liabilities.


In addition, the company provides investment management services for institutional pension fund mandates; and manages various retail investment products, including investment funds, unit trusts, open-ended investment companies, and individual savings accounts for third-party financial institutions, pension funds, public sector organizations, investment professionals, and private investors.It markets its products through a network of insurance brokers, as well as MyAviva platform.The company was formerly known as CGNU plc and changed its name to Aviva plc in July 2002.


Aviva plc was founded in 1696 and is headquartered in London, the United Kingdom.

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1.b. Last Insights on AV

Aviva's recent performance has been impacted by several negative drivers. The company's credit ratings have a negative outlook, according to AM Best, which removed Aviva Insurance Limited's ratings from under review with developing implications. Additionally, Aviva's Direct Line takeover cost savings target was nearly doubled, which may indicate increased expenses. Some analysts have also raised concerns about the company's financial prospects, suggesting it may be overpriced. Furthermore, Aviva's shares have been added to the Zacks Rank #5 (Strong Sell) List multiple times.

1.c. Company Highlights

2. Aviva's Strong 2025 Results: A Deeper Dive

Aviva reported a robust financial performance in 2025, with operating profit rising 25% to GBP 2.2 billion, and IFRS return on equity increasing. The company's operating EPS growth is well into the double digits, with an EPS of 56p. The final dividend was announced at 26.2p per share, up 10% year-on-year. The company's cash remittances were up 4% to GBP 2.1 billion, excluding the funding for Direct Line. As Charlotte Jones noted, "2025 was a strong year for Aviva once again, as we continued our growth momentum."

Publication Date: Mar -06

📋 Highlights
  • Record Operating Profit:: Operating profit surged 25% to £2.2 billion in 2025, driven by strong performance across all segments.
  • Dividend and Buyback Boost:: Final dividend increased 10% to 26.2p/share, with a £350 million share buyback program reinstated.
  • General Insurance Growth:: Premiums rose 18%, nearing the sub-94% combined ratio target, with U.K. business already achieving it.
  • Wealth Leadership:: Assets under management hit £230 billion, with record net flows of £11 billion and a #1 market position expanded.
  • AI and Capital-Light Strategy:: New 3-year targets focus on AI-driven innovation, capital-light growth, and outperforming peers in General Insurance and Wealth.

Segmental Performance

In General Insurance, premiums were up 18%, and the company is approaching the sub 94% combined ratio ambition, already achieving this in the U.K. business. In Wealth, Aviva is extending its #1 position with over GBP 230 billion of assets and growing with record net flows of almost GBP 11 billion. The company's Protection business has improved margins and is nearing completion of the AIG Protection integration program.

Valuation Metrics

To understand what's priced into Aviva's stock, we can look at some key valuation metrics. The company's Price-to-Book Ratio (P/B) is 2.5, and Dividend Yield is 5.7%. These metrics suggest that the market is pricing in a certain level of profitability and dividend sustainability. Given the company's strong financial performance and increased dividend, the current valuation appears reasonable.

Outlook and Guidance

Aviva has raised its ambitions and set new 3-year targets across operating EPS, IFRS return on equity, and cash remittances. The company expects to deliver a 2026 combined ratio of better than 94% for the U.K. and Ireland business. With its diversified group model, scale, and pricing sophistication, Aviva is well-positioned to navigate the current market conditions and capitalize on opportunities in General Insurance, Wealth, and Retirement.

Investment Income and Capital Generation

The company's investment income is expected to be sustainable, and Aviva will continue to grow it from here. The company's capital generation is also expected to be strong, with distributable cash exceeding needs. As Charlotte Jones stated, "We're generating solvency above dividends and share buybacks, with distributable cash exceeding needs."

Conclusion on Financial Health

Aviva's financial health appears robust, with a pro forma solvency of around 180% and a holding company cash of GBP 1 billion. The company's leverage is not a binding constraint on distributable cash, and it is well-positioned to continue delivering strong financial performance and returning capital to shareholders.

3. NewsRoom

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BofA pitches bets against European private credit

Mar -18

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Aviva to use AI virtual agent to streamline phone-led claims journeys

Mar -17

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Assessing Aviva (LSE:AV.) Valuation As Mixed Returns And Direct Line Integration Shape Expectations

Mar -14

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Is Aviva (LSE:AV.) Pricing Make Sense After Strong Multi‑Year Share Gains?

Mar -14

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UK’s PRA fines Direct Line subsidiary over solvency II reporting error

Mar -12

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Every Ripple Partnership in 2026 Has Failed to Move XRP Price: Will This New Development Change That?

Mar -11

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Aviva’s Direct Line Group fined £10.6m for balance sheet reporting errors

Mar -11

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Aviva (AVVIY) Upgraded to Buy: Here's Why

Mar -10

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.29%)

6. Segments

Long-term Business

Expected Growth: 5.4%

Aviva plc's long-term business growth of 5.4% is driven by increasing demand for life insurance and pension products, expansion into emerging markets, and strategic acquisitions. Additionally, the company's focus on digital transformation, cost savings initiatives, and strong brand recognition contribute to its sustained growth.

General Insurance and Health

Expected Growth: 7.88%

Aviva's General Insurance and Health segments have driven 7.88% growth, primarily due to increased premiums in the UK and Canada, as well as expansion in the Asian markets. Additionally, the company's digital transformation efforts and strategic partnerships have enhanced customer engagement, retention, and acquisition, contributing to the segment's growth.

Other

Expected Growth: 8.4%

Aviva plc's 8.4% growth in 'Other' segment is driven by increasing demand for digital insurance products, expansion into emerging markets, and strategic partnerships. Additionally, the company's focus on cost savings and operational efficiencies has led to improved profitability. Furthermore, Aviva's diversified business model and strong brand reputation have enabled it to capitalize on growth opportunities in the market.

Fund Management

Expected Growth: 7.9%

Aviva plc's 7.9% growth in Fund Management is driven by increasing demand for sustainable investments, expansion into emerging markets, and strategic acquisitions. Additionally, the company's digital transformation efforts, cost savings initiatives, and strong brand reputation have contributed to its growth. Furthermore, the rising popularity of passive investing and the need for diversification have also fueled the segment's growth.

7. Detailed Products

General Insurance

Aviva provides a range of general insurance products, including motor, home, travel, and health insurance, to individuals and businesses.

Life Insurance

Aviva offers a range of life insurance products, including term life, whole life, and endowment policies, to provide financial security to individuals and their loved ones.

Pensions and Retirement

Aviva provides a range of pension and retirement products, including personal pensions, group pensions, and annuities, to help individuals plan for their retirement.

Investments

Aviva offers a range of investment products, including unit trusts, open-ended investment companies, and structured products, to help individuals and institutions grow their wealth.

Health and Protection

Aviva provides a range of health and protection products, including private medical insurance, income protection, and critical illness cover, to help individuals and families protect their health and wellbeing.

Wealth Management

Aviva offers a range of wealth management services, including financial planning, investment management, and estate planning, to help individuals and families manage their wealth.

8. Aviva plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Aviva plc operates in a highly competitive industry, and customers have various alternatives to choose from. However, the company's strong brand reputation and diversified product offerings mitigate the threat of substitutes to some extent.

Bargaining Power Of Customers

Aviva plc's customers have significant bargaining power due to the availability of numerous insurance providers in the market. This forces the company to maintain competitive pricing and high-quality services to retain customers.

Bargaining Power Of Suppliers

Aviva plc has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's strong financial position and long-term relationships with suppliers also mitigate the risk of supplier concentration.

Threat Of New Entrants

The insurance industry has high barriers to entry, including regulatory requirements, capital requirements, and the need for specialized expertise. These barriers limit the threat of new entrants and provide Aviva plc with a relatively stable market position.

Intensity Of Rivalry

The insurance industry is highly competitive, with numerous established players competing for market share. Aviva plc faces intense rivalry from competitors, which drives the company to focus on innovation, customer service, and cost management to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 46.28%
Debt Cost 8.58%
Equity Weight 53.72%
Equity Cost 8.58%
WACC 8.58%
Leverage 86.16%

11. Quality Control: Aviva plc passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Grupo Catalana Occidente

A-Score: 8.1/10

Value: 8.4

Growth: 4.3

Quality: 7.9

Yield: 9.4

Momentum: 9.0

Volatility: 9.7

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Aviva

A-Score: 7.4/10

Value: 6.5

Growth: 5.4

Quality: 5.8

Yield: 9.4

Momentum: 8.0

Volatility: 9.3

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Ageas

A-Score: 7.1/10

Value: 5.7

Growth: 4.1

Quality: 6.2

Yield: 9.4

Momentum: 7.0

Volatility: 10.0

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Unipol Gruppo

A-Score: 6.9/10

Value: 5.0

Growth: 4.1

Quality: 6.4

Yield: 8.8

Momentum: 9.5

Volatility: 7.3

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UNIQA

A-Score: 6.8/10

Value: 4.8

Growth: 3.4

Quality: 4.8

Yield: 8.8

Momentum: 10.0

Volatility: 9.0

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NN Group

A-Score: 6.7/10

Value: 3.9

Growth: 3.4

Quality: 5.9

Yield: 8.8

Momentum: 9.0

Volatility: 9.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.21$

Current Price

6.21$

Potential

-0.00%

Expected Cash-Flows