Key insights
- Aviva's Q1 results showed strength in wealth management, with net flows exceeding estimates. However, insurance premiums missed expectations, particularly in UK commercial and personal lines. The UK combined operating ratio was less favorable than anticipated, while Canada's was better. Aviva reaffirmed its full-year guidance. Overall, the report presents a mixed picture with a slightly negative tilt due to insurance underperformance.
Investing.com -- Aviva Plc (LON:AV) reported first-quarter 2026 wealth net flows up 49% year-on-year, while total general insurance gross written premiums came in 8% below Goldman Sachs estimates, as UK commercial lines premiums fell 8% year-on-year in what Goldman Sachs described as "a bit of a mixed bag."
Wealth net flows of £3.35 billion for the three months to March 31 were 25% above Goldman Sachs estimates of £2.67 billion.
Workplace flows of £1.99 billion were up 71% year-on-year and platform net flows of £1.59 billion were up 24% year-on-year, according to Goldman Sachs figures.
Total general insurance GWP of £3.43 billion was 8% below the Goldman Sachs estimate of £3.72 billion. UK commercial lines premiums of £834 million were 8% lower year-on-year and 6% below the Goldman Sachs estimate of £887 million, reflecting what the company described as "deliberate underwriting actions to manage profitability in softer market conditions."
UK personal lines GWP of £1.53 billion was 14% below the Goldman Sachs estimate of £1.78 billion, though Goldman Sachs attributed the gap to its own base-year assumption on the Direct Line quarterly split. Canada’s GWP of £907 million was 1% above the Goldman Sachs estimate of £897 million.
The UK undiscounted combined operating ratio came in at 94.8%, 80 basis points less favourable than Goldman Sachs estimated, while Canada’s COR of 91.8% was 2.5 percentage points more favourable than the Goldman Sachs estimate of 94.3%.
Aviva reiterated its full-year 2026 guidance of a UK and Ireland COR below 94% and a Canada COR approaching 94%.
In retirement, bulk purchase annuity flows of £619 million exceeded the Goldman Sachs estimate of £260 million. However, the retirement value of the new business margin of 1.2% was 2.3 percentage points below the Goldman Sachs estimate of 3.5%.
Aviva said IRRs of at least low teens were achieved. Citi noted the annuity and equity release margin "reflecting volume pressure."
Protection and health APE of £113 million was 6% below the Goldman Sachs estimate of £120 million. VNB for protection and health fell 16% to £54 million, below Citi’s estimate of £62 million.
The Solvency II ratio of 171% was in line with Goldman Sachs and Citi estimates. Aviva said it expects the ratio to be above 180% by full-year 2026.
Goldman Sachs cut its 2026 to 2030 earnings per share estimates by an average of approximately 0.7% and reduced its 12-month price target by approximately 1% to 756 pence.