Aviva posts strong Q3 trading update, shares up

Investing.com -- Shares of Aviva (LON:AV ) rose on Thursday following its trading update that posted strong sales across key areas, despite challenges from increased insurance claims in Canada. 

At 3:33 am (0833 GMT), Aviva was trading 2.8% higher at £467.40.

“This is a significantly better trading update from Aviva than weexpected, with the undiscounted and discounted P&C combined ratio better than we forecast (by 1ppt in 3Q24), better top-line growth in the P&C business and solid life new business profits,” said analysts at J.P. Morgan in a note.

The company reported growth in multiple segments, including a 15% increase in General Insurance premiums, a 21% rise in Wealth net flows, and a 22% increase in Protection & Health sales. 

Retirement sales surged by 67%, reaching £7.3 billion, with £6.1 billion attributed to bulk annuity deals—a figure already at the high end of the group’s expectations for 2024.

The results reflect Aviva’s success in weathering sector-wide challenges, particularly in General Insurance, where the Canadian segment experienced high catastrophe losses that impacted the company’s 3Q standalone undiscounted combined ratio, which rose to 110%. 

“Given the elevated industry-wide catastrophe losses in Canada during 3Q, we're reassured to find that Aviva expects to have incurred claims costs that are broadly in line with their market share,” said analysts at Jefferies in a note. 

Meanwhile, Aviva’s operating capital generation across other segments remained strong, providing a buffer against the Canadian losses and the capital impact of high sales volumes. 

This helped the company absorb these pressures without major impact to its Solvency II capital ratio, which dipped only slightly from 205% at the half-year mark to 195% in the third quarter—still within market expectations.

Despite the claims burden in Canada, Aviva’s overall performance metrics were largely positive. The group’s combined operating ratio, a key profitability measure, held steady at 92.8% on a discounted basis. 

General Insurance gross written premiums rose by 15% to reach £9.1 billion year-to-date, driven by an 18% increase in the UK and a 7% gain in Canada. 

In addition, Aviva’s Wealth net flows reached £7.7 billion, marking a 21% year-over-year growth as the company continued to capture interest in its retirement and investment offerings.

Jefferies analysts noted that Aviva’s performance benefited from strategic pricing adjustments and underlying improvements in the combined operating ratio, which are expected to continue bearing fruit over the coming quarters. 

The company’s bulk annuity volumes have already reached £7.8 billion year-to-date, and while some moderation in Protection & Health growth is anticipated, the overall trajectory remains positive. 

Aviva reiterated its guidance for the year, underscoring confidence in its outlook amidst a competitive insurance landscape.

“We believe there will be consensus upgrades to reflect better life new business sales (and therefore, potentially CSM) and better P&C top-line growth and margins than we expected,” said analysts at J.P. Morgan.

Source: Investing.com

Последние публикации
Mega cap outperformance not due to passive flows: Citi
25.11.2024 - 12:00
US finalizes awards to BAE Systems, Rocket Lab for semiconductor chips
25.11.2024 - 12:00
Anglo American selling Australian coal mines to Peabody Energy for up to $3.8 bn
25.11.2024 - 12:00
Year-end market rally will start this week, says Goldman's Rubner
25.11.2024 - 12:00
India stocks higher at close of trade; Nifty 50 up 1.44%
25.11.2024 - 12:00
ITV jumps on reports of potential takeover interest
25.11.2024 - 12:00
Air taxi firm Vertical says Mudrick to convert some notes to equity, extend repayment deadline
25.11.2024 - 12:00
Apple supplier Corning offers to waive exclusive deals in EU antitrust probe
25.11.2024 - 12:00
Near-term volatility is an opportunity to add S&P 500 exposure, Evercore says
25.11.2024 - 12:00
Kingfisher misses Q3 forecasts, shares tumble
25.11.2024 - 11:00
Barclays fined £40m by FCA over disclosures related to Qatar dealings
25.11.2024 - 11:00
Barclays raises year-end 2025 S&P 500 price target to 6600 from 6500
25.11.2024 - 11:00
TotalEnergies pauses business with Adani, says it was not aware of US investigation
25.11.2024 - 11:00
European markets trade higher as Trump pick boosts sentiment
25.11.2024 - 10:00
BYD says it will launch new generation of blade batteries next year
25.11.2024 - 10:00

© Analytic DC. All Rights Reserved.

new
Анализ рынка Как повлият завтра отчет NFP на курс доллара США?