British insurer Aviva has reported general insurance (GI) premium growth of 15% to £9.1 billion for the first nine months of 2024 compared to £8 billion in the same period last year.
Country-wise, UK&I GI premiums grew by 18% to £5.7 billion in 9M’24, up from 9M’23’s £4.9 billion, with 25% growth in personal lines and 11% growth in commercial lines, both driven by continued strong new business and pricing actions to offset the inflationary environment.
Canada GI premiums are up 11% to £3.4 billion for 9M’24 compared to £3.2 billion for 9M’23, with personal lines up 13% driven by pricing actions and strong new business growth, as commercial lines grew by 8%, reports the firm.
In GI, Aviva continues to benefit from market-leading pricing sophistication and expects the underlying combined ratio to improve as rating actions taken earn through.
While the inflationary environment has improved, the group has reiterated its focus on pricing appropriately for claims inflation.
The group’s undiscounted combined operating ratio remained relatively flat at 96.8% for 9M’24 compared to 9M’23’s 96.3%, the improvement was driven by pricing actions taken that continue to earn through, somewhat offset by elevated natural catastrophe events in Canada.
Aviva explained that the protection sales were up 44% following the completion of the AIG UK protection acquisition in April, and also reported double-digit growth in health in-force premiums.
The estimated Solvency II shareholder cover ratio remains robust at 195% compared to HY24’s 205%
The firm stated, “Our businesses continued to deliver strong operating capital generation, which in Q3 was sufficient to absorb the impact of exceptionally high Canada CATs and the solvency strain from strong Q3 BPA sales. In addition, economic impacts, mainly from falling interest rates, reduced the SII cover ratio by 3pp. After the interim dividend (-4pp) and completion of the Probitas acquisition (-3pp) the overall SII cover ratio reduced from 205% to 195% over the quarter.”
The solvency II debt leverage ratio is 29.5% compared to 31.1% in HY24, following the redemption of the €700m Tier 2 notes in July. In September, the firm completed a £500m Tier 2 debt tender and new issuance which was neutral to the debt leverage ratio.
The group is confident in achieving the targets outlined in its full-year results presentation, which includes an operating profit of £2 billion by 2026, solvency II OFG of £1.8 billion by 2026, and cash remittances of less than £5.8 billion cumulative 2024-2026.
The Health business is anticipated to further grow in line with the ambition for double-digit growth in in-force premiums, with some moderation in Protection growth expected.
Aviva aims to reach more than 21 million customers, including 5.7 million UK customers with two or more Aviva policies by 2026.
Amanda Blanc, Group Chief Executive Officer, Aviva, commented, “Our third quarter performance has been very strong. Trading continues to be extremely positive right across the business, underlining the strength of our consistent strategy and the significant benefits of Aviva’s scale and diversification.
“Quarter after quarter, we are delivering consistently superior results and growing Aviva, particularly in the capital-light businesses. General insurance premiums are up 15%, and wealth net flows of £7.7bn are 21% higher reflecting continued growth in workplace pensions and strong demand from our financial adviser platform business. The bulk purchase annuity market remains very active and we have increased volumes, at good margins and disciplined capital usage, to £6.1bn.
“Aviva’s large and growing customer base is a major advantage, contributing to our excellent performance. Over the last four years we have increased customer numbers by 1.2m to 19.6m. We now have five million UK customers with more than one policy and, as the UK’s leading diversified insurer, the potential to grow this further is huge.”
“Aviva is financially strong, trading well each quarter and has significant opportunities for further growth. We are confident about the outlook for the rest of 2024 and beyond, growing the dividend and achieving the Group’s financial targets,” she concluded.
