Aviva Plc (AV.L) 1H'26 First Take 5 Operating EPS beat, with c.11 growth guidance for FY'26

Equity Research 14 August 2026 | 7:03AM BST

Aviva Plc (AV.L): 1H’26 First Take: 5% Operating EPS beat, with c.11% growth guidance for FY’26

1H’26 operating EPS is a c.5% beat vs. consensus, primarily driven by a c.5% beat in Andrew Baker, CFA | General Insurance and lower group costs. General Insurance GWP is a c.4% beat Goldman Sachs International driven by a more resilient Commercial result in both the UK and Canada. The 93.3% Vash Gosalia, CFA undiscounted COR is a c.90bp beat but benefited from c.4ppts / c.0.5ppts of | favourable PYD / weather, resulting in a normalised COR of 97.8%. Aviva reiterates its Goldman Sachs International

FY’26 COR guidance (<94% in UK & Ireland / approaching 94% in Canada) and remains confident in the outlook as reserve releases are now seen as structural, underpinned by: 1) IFRS risk adjustment releases (c.1-2ppts), and 2) reserving strength at the upper end of the best estimate range. In IWR, relative to our estimates, 2Q’26 Retirement and Protection & Health new business is a little light but on a higher margins, and Wealth flows continue to be very strong, supported by both Workplace and Platform. Solvency II was a c.2ppts miss on market movements, but for FY’26, a ratio of high 180s is expected. Cash remittances are a strong beat, which partially reflect 1H/2H timing differences. For FY’26, Aviva is now guiding to Operating EPS growth of c.11% (including a downgrade to the Health operating profit to £90mn from £100mn), which compares to Visible Alpha Consensus Data of c.10.6% leading into the day. All 2025 to 2028 Group targets are reiterated, and Aviva also provides additional slides with a focus on sustained capital light growth beyond this date. We expect some questions on the sustainability of reserve releases and will wait for the call for confirmation of an improving UK personal lines pricing outlook, but overall, we see the print as solid enough and supportive of its 3-year targets. We increase our 2026 to 2030 EPS estimates modestly (c.0.7% on average) and our price target by c.1% to 767p. We are Buy rated.

General Insurance - top line 1H’26 General Insurance GWP is a c.4% / 2% beat vs. consensus / GS. Relative to our estimate, this was driven by stronger growth in both UK and Canada commercial lines. UK commercial lines saw broadly stable growth in 2Q standalone (vs.-7.8% in 1Q), reflecting strong retention and the more stable nature of its SME segment vs. the GCS book where conditions are more challenging. Canada commercial also saw modest 2Q growth as it benefited from some large wins in GCS.

2Q’26 Personal Lines premiums were broadly in line with our estimates in both the UK and Canada. On a y-o-y basis, the UK benefited from Direct Line as well as growth in its intermediated channel. Canada continued to benefit from pricing actions in auto and property.

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Goldman Sachs Aviva Plc (AV.L)

General Insurance - combined ratio (COR) After delivering a group undiscounted COR of 94.1% in 1Q, we estimate Aviva delivered a 92.7% 2Q COR, which was c.1.1ppts more favourable than our estimate. On a 1H’26 basis, the undiscounted COR of 93.3% is c.90bps / 70bps more favourable vs. consensus / GS. Relative to our estimates, this was broad based with beats across the board. The 1H’26 undiscounted COR benefited from c.4ppts from favourable PYD and c.0.5ppts from favourable weather in the period. The normalised COR was therefore c.97.8%; however, Aviva notes that it manages its COR on an undiscounted headline basis, and that reserve releases are now seen as structural from: 1) IFRS risk adjustment releases (c.1-2ppts), and 2) reserving strength at the upper end of the best…