Aviva reported a sharp divergence between its underlying and reported profitability during the first half of 2026, with Group operating profit increasing 24% to £1.326 billion from £1.068 billion while IFRS profit for the period fell 49% to £418 million from £819 million.
The gap was driven primarily by £490 million of negative investment variances, compared with positive investment variances of £251 million in the first half of 2025, as well as integration and restructuring costs and other non-operating items. Aviva said the investment variance primarily reflected the effects of hedging interest-rate and equity exposures.
Operating earnings per share nevertheless increased 10% to 31.8 pence from 29 pence, while IFRS basic EPS declined 44% to 12.2 pence from 21.7 pence. IFRS return on equity improved to 20.3% from a normalized 18.2%.
The operating-profit comparison also includes an important portfolio change. Aviva completed its acquisition of Direct Line on July 1, 2025, meaning the first-half 2026 operating results include Direct Line while the comparable first-half 2025 figures do not.
Direct Line is already contributing materially to Aviva’s integration strategy. The company has delivered £100 million of run-rate cost synergies toward its £225 million target, transferred nearly £5 billion of assets to Aviva Investors and returned Direct Line motor policies sold through price-comparison websites to growth, with policy count up 7% this year.
Aviva expects the integration to produce additional balance-sheet benefits. More than £350 million of remaining Direct Line capital synergies are expected by year-end, subject to regulatory approval, and management estimates those synergies would increase the current Solvency II shareholder cover ratio by more than seven percentage points.
The group’s General Insurance business was the largest contributor to operating profit, generating £905 million compared with £648 million. UK and Ireland General Insurance operating profit increased to £643 million from £430 million, while Canada increased to £262 million from £218 million.
General Insurance premiums increased 29% to £8.09 billion, including a 42% increase in UK and Ireland premiums to £5.91 billion. UK personal-lines premiums nearly doubled, rising 98%, primarily reflecting the addition of Direct Line and continued growth in Aviva’s intermediated business.
Wealth is another important growth area. Net flows increased 32% to £7.6 billion, while assets under management reached £261 billion. Workplace net flows rose 36% to £5.1 billion, including £1.5 billion from initial Mercer Master Trust transfers, and Wealth operating profit increased 34% to £102 million.
Aviva Investors also moved from £1.2 billion of net outflows to £1.5 billion of net inflows. The asset manager had £273 billion of total AUM at the end of the period, including £235 billion managed for other Aviva businesses.
Cash remittances increased 47% to £1.498 billion from £1.022 billion, moving Aviva toward its target of more than £7 billion of cumulative remittances from 2026 through 2028. Approximately £800 million of additional remittances are expected during the second half of 2026.
Aviva increased its interim dividend 7% to 14 pence per share. The company expects 2026 operating EPS growth to be broadly in line with its 11% target rate and remains focused on achieving an 11% operating EPS compound annual growth rate from 2025 through 2028, IFRS return on equity above 20% and more than £7 billion of cumulative cash remittances.
KEY QUOTES:
“Aviva’s results in the first half of 2026 were very strong, with operating profit up 24% to £1.3 billion. We have now achieved six consecutive years of excellent financial performance, with much more to come. We also continue to deliver for our shareholders and today we have increased the interim dividend by 7% to 14.0 pence per share.
“We are making very good progress with the integration of Direct Line. We have quickly improved Direct Line’s profitability, grown price comparison website sales, and maintained excellent levels of customer service. We are well on track to deliver all the financial benefits of the acquisition.
“We are confident that we will meet our three-year financial targets in 2028 and expect 75% of our earnings to be capital-light by that point. Beyond this, Aviva is in a great position to sustain strong earnings growth over the longer term, particularly in the high growth areas of Wealth, UK and Canada General Insurance, Global Corporate and Specialty, and Health and Protection.
“Our broad and now expanded range of products, 25 million strong customer base, market leading brand, and the rich and extensive data we have, are major competitive advantages which will drive our future growth. Together they represent a significant opportunity for Aviva to apply artificial intelligence to deliver an even better service to customers, meet more of our customers’ needs over their lifetime, and drive even more value for our shareholders. Aviva’s long-term prospects are very bright indeed.”
Amanda Blanc, Group Chief Executive Officer of Aviva
