Aviva: What We Think of the Stock After Earnings

Key Morningstar Metrics for Aviva

• Fair Value Estimate
  : GBX 640
• Morningstar Rating
  : ★★★
• Morningstar Economic Moat Rating
  : None
• Morningstar Uncertainty Rating
  : Medium

What We Thought of Aviva’s Earnings

For the first half of 2026, Aviva AV. has delivered a broadly in-line set of numbers versus the company-compiled consensus. Bottom-line earnings are ahead of our full-year estimates, yet that is predominantly due to a light tax impact.

Why it matters: Operating profit of 1.33 billion is slightly better than the £1.26 billion consensus estimate, as general insurance has outperformed. Bottom-line numbers look elevated, yet pretax profit of £905 million looks broadly in line with our £1.83 billion full-year forecast.

• In Insurance, Wealth and Retirement, assets under management are up double digits for both the Workplace and Adviser Platform businesses, driven by strong net flows. Both are solid, a little more so in Workplace, with the first schemes having been onboarded since winning the Mercer Master Trust.
• In General Insurance, the addition of Direct Line has helped drive UK personal lines gross premiums up to £3.679 billion, a rise of close to 100%. The Nationwide home insurance partnership has also helped.

The bottom line: We maintain our GBX 640 per-share fair value estimate and our no-moat Rating. Shares screen as overvalued.

• The business is targeting £225 million of cost synergies through IT, insurance operations, and head office and central functions. To be taken out between 2025 and 2028, Aviva achieved £50 million in the second half of last year, and another £50 million this half, £100 million in total so far.
• And with a further more than £50 million targeted to be taken out annually from Direct Line general insurance claims, and £40 million reportedly achieved so far, the business is well on track to deliver on its ambitions on costs.