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Aviva (AVVIY)
OTHER OTC:AVVIY
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Aviva
(OTC:AVVIY)
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Rating:62Neutral
Price Target:
$18.00
▲(4.59% Upside)
Action:ReiteratedDate:03/08/26
The score reflects strong valuation support (low P/E and high dividend) and a constructive earnings-call outlook (capital strength, buyback/dividend growth, and clear multi-year targets), offset by weaker technical momentum and a fundamental risk from inconsistent cash-flow generation and thin/variable profitability.
Positive Factors
Revenue Growth
Strong revenue growth indicates robust demand for Aviva's products and services, enhancing its market position and potential for future expansion.
Stable Balance Sheet
A stable balance sheet with a manageable debt-to-equity ratio supports financial resilience and flexibility for strategic investments.
Efficient Cash Conversion
Efficient cash conversion indicates effective management of resources, supporting sustainable operations and potential for reinvestment.
Negative Factors
Declining Profitability Margins
Declining margins may indicate rising costs or inefficiencies, potentially impacting long-term profitability and competitiveness.
Negative Operating Cash Flow
Negative operating cash flow can strain liquidity, affecting the company's ability to fund operations and invest in growth opportunities.
Reduced Return on Equity
A decline in ROE suggests reduced profitability for shareholders, which may affect investor confidence and capital raising capabilities.
Aviva (AVVIY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$25.98B
Dividend Yield5.27%
Average Volume (3M)4.41K
Price to Earnings (P/E)19.2
Beta (1Y)0.47
Revenue Growth-17.44%
EPS Growth-52.47%
CountryUS
Employees29,091
SectorFinancial
Sector Strength70
IndustryInsurance - Diversified
Share Statistics
EPS (TTM)0.73
Shares Outstanding1,528,818,600
10 Day Avg. Volume0
30 Day Avg. Volume4,408
Financial Highlights & Ratios
PEG Ratio1.54
Price to Book (P/B)1.86
Price to Sales (P/S)0.35
P/FCF Ratio-7.22
Enterprise Value/Market Cap0.37
Enterprise Value/Revenue0.17
Enterprise Value/Gross Profit0.16
Enterprise Value/Ebitda11.54
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.6
Revenue Forecast (FY)$60.64B
Aviva Business Overview & Revenue Model
Company DescriptionAviva plc provides various insurance, retirement, investment, and savings products in the United Kingdom, Ireland, Canada, and internationally. The company offers life insurance, long-term health and accident insurance, savings, pension, and annuity products, as well as pension fund business and lifetime mortgage products. It also provides insurance cover to individuals, small and medium-sized businesses for risks associated with motor vehicles and medical expenses, as well as property and liability, such as employers' and professional indemnity liabilities. In addition, the company provides investment management services for institutional pension fund mandates; and manages various retail investment products, including investment funds, unit trusts, open-ended investment companies, and individual savings accounts for third-party financial institutions, pension funds, public sector organizations, investment professionals, and private investors. It markets its products through a network of insurance brokers, as well as MyAviva platform. The company was formerly known as CGNU plc and changed its name to Aviva plc in July 2002. Aviva plc was founded in 1696 and is headquartered in London, the United Kingdom.
How the Company Makes MoneyAviva generates revenue through multiple key streams, primarily from premiums collected from its insurance policies, which include life, health, and property insurance. The company also earns significant income from its asset management services, where it manages investments for individuals and institutions, charging fees based on the assets under management. Additionally, Aviva benefits from investment income derived from its investment portfolio, which includes equities, bonds, and real estate. Strategic partnerships with financial institutions and distribution channels enhance its market reach, contributing to its overall financial performance. Moreover, Aviva's focus on digital transformation and enhancing customer experience is aimed at increasing customer retention and attracting new clients, which further solidifies its revenue base.
Aviva Earnings Call Summary
Earnings Call Date:Mar 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 06, 2026
Earnings Call Sentiment Positive
The call presents a strongly positive operating and capital position: management beat near‑term targets early, reported robust profit and capital metrics (operating profit +25%, EPS ahead of baseline, solvency c.180%), raised ambitions and resumed shareholder returns (dividend +10%, GBP 350m buyback). Wealth, GI and AI-driven efficiency gains are clear growth and margin levers. The key risks highlighted are cyclical underwriting volatility (large losses, weather), short-term drag and execution risk from Direct Line integration, some reduced protection sales, and competitive pressures in bulk annuities/Commercial Lines. Overall the positives — delivered results, capital strength, clear synergy and AI upside, and upgraded targets — substantially outweigh the manageable near-term challenges.Q4-2025 Updates
Positive Updates
Strong overall financial performance
Operating profit rose 25% to GBP 2.2 billion; basic operating EPS was 56p (ahead of the 55p baseline); IFRS return on equity was 17.5%. Cash remittances increased 4% to GBP 2.1 billion and own funds generation (OFG) was GBP 2.3 billion. Solvency cover was strong at c.180%.
Capital returns to shareholders
Final dividend increased 10% to 26.2p (total dividend 39.3p, +10% year-on-year). Share buyback programme resumed at GBP 350 million. Management reiterated progressive dividend policy and regular buybacks as part of capital allocation.
General Insurance growth and improving margins
Group General Insurance premiums grew materially (Amanda: +18% year-on-year; Charlotte noted U.K. & Ireland premiums +27% driven by Direct Line inclusion). U.K. combined ratio was 93.9% (1.0 point improvement); group combined ratio reported ~94.6% with management targeting 'better than 94%' for 2026 (subject to normal weather). GI operating profit expanded (c. GBP 1.5 billion) and GI represented the largest share of unit profit.
Wealth momentum — higher assets, flows and profitability
Wealth AUM > GBP 230 billion; record net flows almost GBP 11 billion. Workplace AUM GBP 153 billion with net flows +6% and ~GBP 1 billion of regular monthly member contributions. Adviser Platform flows +11%; Direct Wealth customer base grew ~33% to >100,000. Wealth operating profit +36%, operating margin improved ~1.1 percentage points and operating profit as a portion of revenue reached 23% (+4 points). On track for GBP 280m Wealth profit ambition in 2027.
Retirement & bulk annuity capability
Wrote GBP 4.6 billion of bulk purchase annuities in 2025; Aviva Investors originated GBP 3.5 billion of real assets to support deals. Achieved mid-teens IRR on transactions and individual annuity sales were up 19% to GBP 1.6 billion (highest since 2015 reforms).
AI and operational efficiency gains
Tangible AI benefits already realised: halved medical underwriting review time, reduced call wrap time by 20% in Direct Wealth, and c. GBP 100 million saved so far through claims transformation. Announced partnership with OpenAI and progressing an in-house AI-enabled claims agent to handle simple claims end-to-end (voice-enabled). Management are funding AI/automation within existing change budgets and citing further upside.
Direct Line integration progress and cost synergy delivery
6-month contribution included from Direct Line; GBP 2.9 billion of assets transferred to Aviva Investors; Direct Line cost programme of GBP 100m achieved and first GBP 50m of group cost savings realised in H2 2025 (contributed ~GBP 10m to 2025 operating profit). Group uplifted cost savings ambition to GBP 225m (remaining GBP 175m to be delivered over the next three years) and investing c. GBP 50m to capture at least GBP 50m annual claims cost benefits.
Negative Updates
Combined ratio and underwriting headwinds remain cyclical
Underlying combined ratio pressure noted (Charlotte cited underlying COR rising to c.96.7% in some measures) and group COR was 94.6% in 2025. Management’s pledge to deliver 'better than 94%' in 2026 depends on prior-year development, improved large-loss experience, normal weather and full-year benefits from rate/actions - none of which are guaranteed.
Elevated large losses and weather impacts
Commercial Lines experienced elevated large losses in 2025 and storm Eowyn in Q1 negatively impacted COR (group including Ireland 94.1%). Management noted pockets of idiosyncratic large loss exposure and cautioned that some H2 weather-driven benign experience is not assumed to repeat.
Direct Line still a drag in short term and integration execution risks
Direct Line is not yet performing at management’s target level and had a negative impact in the second half (integration ongoing). Delivering remaining cost synergies (GBP 175m) and claims benefits remains execution-dependent; headcount/office rationalisation and systems/pricing integration create integration risk in the near term.
Protection sales and health demand constrained
Protection sales were lower following consolidation of AIG and Aviva propositions; Health demand was affected by cost-of-living pressure and national insurance changes despite in-force premiums growing ~12%. Protection margins improved ~90 bps but sales weakness is a near-term adverse trend.
Retirement / IFRS earnings headwinds
Retirement operating profit was ~5% lower as higher contractual service margin releases were offset by a lower investment result; BPA volumes were 'more typical' versus an elevated 2024 year. IFRS 17 effects and mix/assumption timing (Q4 impacts) weighed on some Life VNB/IFRS metrics.
Reserve strengthening and selective portfolio remediation
Management noted some reserve strengthening in the second half across markets (Canada and U.K.) and portfolio actions in Canada (Commercial lines remediation) that constrained top-line growth; these one-off adjustments and prudent reserving temper near-term metrics.
Competitive pressure in bulk annuities and certain commercial lines
Management acknowledged increasing competition in the bulk annuity market and softer conditions in parts of Commercial Lines (Canada and some UK segments). Continued discipline required to protect returns despite attractive IRRs; potential for margin compression in a more competitive environment.
Company Guidance
The call reiterated near‑term and 3‑year guidance: Aviva has already met its 2026 targets and expects U.K. & Ireland General Insurance to deliver a combined ratio better than 94% in 2026 (group COR was 94.6% in 2025; underlying 96.7%), Canada’s COR is expected to approach 94%, and the group is targeting an 11% operating EPS CAGR from 2025–2028 (55p baseline to ~75p by 2028; 2025 EPS was 56p). Financial and capital guidance included a resumed GBP 350m share buyback, a final dividend of 26.2p (total 39.3p, +10% y/y), solvency back to c.180% supported by GBP 2.3bn OFG, delivery of at least GBP 350m (c.7 points) of solvency benefit from Direct Line synergies by year‑end and a progressive operating capital generation build of ~20 points in 2027. Business targets reiterated: GBP 280m Wealth profit ambition by 2027, further acceleration beyond 75% capital‑light, Direct Line cost savings uplift to GBP 225m (GBP 100m achieved; GBP 50m delivered in H2 2025; remaining GBP 175m over next 3 years), and continued investment (including ~GBP 50m to unlock ≥GBP 50m p.a. claims benefits) to drive productivity and AI‑enabled improvements.Aviva Financial Statement Overview
Summary
Mixed fundamentals: balance sheet strength is relatively solid (improving debt-to-equity and steady positive ROE), but profitability is thin and volatile and cash flow is the key weakness with operating/free cash flow flipping negative in multiple recent years, reducing earnings visibility.Income Statement
Revenue growth accelerated sharply in 2025 (annual) versus prior years, but profitability remains thin and somewhat volatile. Net profit margin fell to ~1.8% in 2025 from ~3.0% in 2024, and earnings have swung from a loss in 2022 to profits in 2023–2025. Overall, the top-line trajectory looks strong recently, but the earnings quality and margin stability are only mid-tier.58
Neutral
Balance Sheet
Leverage looks manageable for a diversified insurer, with debt-to-equity improving to ~0.68 in 2025 from ~0.83 in 2024, and equity increasing versus 2024. Returns on equity are positive and steady in 2023–2025 (~9.7% in 2025) after a weak 2022. The main watchout is that the business runs with very large assets relative to equity (typical in insurance), so confidence depends on maintaining consistent profitability and capital discipline.67
Positive
Cash Flow
Cash generation is the weakest area due to significant volatility: operating cash flow was strongly positive in 2022 and 2024, but turned negative in 2021, 2023, and 2025. Free cash flow also flipped to negative in 2025 (and 2023) after a very strong 2024, indicating inconsistent cash conversion and potential working-capital/reserve timing swings. This uneven pattern reduces visibility despite occasional very strong years.42
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 57.44B | 22.74B | 21.58B | 16.20B | 16.66B |
| Gross Profit | 58.84B | 22.74B | 40.76B | -20.72B | 16.66B |
| EBITDA | 2.06B | 1.58B | 2.03B | -887.00M | 1.33B |
| Net Income | 1.03B | 683.00M | 1.08B | -1.05B | 1.97B |
Balance Sheet | |||||
| Total Assets | 395.30B | 353.88B | 328.84B | 315.32B | 358.47B |
| Cash, Cash Equivalents and Short-Term Investments | 18.55B | 23.48B | 17.27B | 22.50B | 12.48B |
| Total Debt | 7.31B | 6.89B | 7.37B | 8.07B | 8.47B |
| Total Liabilities | 384.21B | 345.26B | 319.24B | 302.42B | 339.02B |
| Stockholders Equity | 10.69B | 8.30B | 9.28B | 9.90B | 19.20B |
Cash Flow | |||||
| Free Cash Flow | -2.75B | 8.27B | -3.08B | 15.78B | -2.97B |
| Operating Cash Flow | -2.56B | 8.45B | -2.73B | 15.88B | -2.86B |
| Investing Cash Flow | -1.14B | 162.00M | -350.00M | -339.00M | 74.00M |
| Financing Cash Flow | -2.04B | -2.49B | -1.82B | -5.94B | -4.40B |
Aviva Technical Analysis
Negative
17.21
Price Trends
17.62
Negative
17.59
Negative
17.41
Negative
Market Momentum
-0.23
Positive
42.43
Neutral
20.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVVIY, the sentiment is Negative. The current price of 17.21 is below the 20-day moving average (MA) of 17.36, below the 50-day MA of 17.62, and below the 200-day MA of 17.41, indicating a bearish trend. The MACD of -0.23 indicates Positive momentum. The RSI at 42.43 is Neutral, neither overbought nor oversold. The STOCH value of 20.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AVVIY.
Aviva Risk Analysis
Aviva disclosed 15 risk factors in its most recent earnings report. Aviva reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Aviva Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $33.34B | 7.15 | 19.02% | ― | 16.68% | -28.54% | |
79 Outperform | $37.17B | 10.14 | 21.37% | 1.55% | 7.11% | 22.52% | |
73 Outperform | $18.75B | 16.80 | 10.26% | 3.44% | 12.33% | ― | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $10.40B | 4.30 | 14.36% | 5.77% | -6.19% | ― | |
67 Neutral | $41.07B | 15.62 | 7.50% | 2.02% | -23.02% | 52.43% | |
62 Neutral | $25.98B | 19.24 | 10.20% | 5.27% | -17.44% | -52.47% |
* Financial Sector Average
AVVIY
Aviva
17.04
3.53
26.13%
AEG
Aegon
6.93
0.69
11.06%
AIG
American International Group
76.54
-5.52
-6.72%
ACGL
Arch Capital Group
93.70
-1.58
-1.66%
HIG
Hartford Insurance
134.75
16.28
13.74%
PFG
Principal Financial
86.45
5.69
7.05%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.