Investing.com -- Aviva (LON:AV) exceeded profit expectations for 2024, driven by strong double-digit growth in its general insurance premiums. The British insurer also confirmed that its planned £3.7 billion acquisition of Direct Line (LON:DLGD) is progressing as expected.
Aviva’s shares rose nearly 1% in London trading Thursday as of 08:50 GMT.
The company, which provides car, home, and life insurance in the UK, Ireland, and Canada, reported an operating profit of £1.77 billion ($2.24 billion) for the year ending December 31, surpassing the £1.67 billion consensus estimate compiled by the company.
General insurance gross written premiums rose 14% to £12.2 billion, while growth in Aviva’s UK and Ireland insurance, wealth, and retirement division also outpaced forecasts.
Jefferies analysts described Aviva’s 2024 results as “straightforward, and better than hoped.”
"There is so much untapped potential for Aviva to go after and I have real confidence in our ability to unlock this," CEO Amanda Blanc said in a statement.
Less positively, Aviva’s Canadian operations faced significant challenges, with annual operating profit declining by 25% due to a series of severe natural disasters.
Canada recorded its highest-ever insured losses of C$8.5 billion in 2024, following wildfires in Jasper, a hailstorm in Calgary, and widespread flooding, according to the Insurance Bureau of Canada.
Insurers have long acknowledged the growing impact of climate change on risk assessment. In 2021, Aviva became the first insurer to set a net-zero target for 2040 and reaffirmed its commitment on Thursday.
Meanwhile, the US has recently taken a more critical stance on net-zero goals, in line with President Donald Trump’s policy direction. Last week, US Energy Secretary Chris Wright criticized the British government’s approach to clean energy targets.
"While we are working towards our sustainability ambitions, we recognize that while we have control over Aviva’s operations and influence over our supply chain, when it comes to decarbonizing the economy in which we operate and invest, Aviva is one part of a far larger global system," the company said in a statement.
Aviva provided no new details on potential capital synergies from its Direct Line acquisition, aside from stating they are significant and will develop over time.
However, management highlighted a mid-single-digit increase in dividends per share (DPS) after the deal closes, with similar growth expected in the cash cost of the dividend from the new base.
Jefferies analysts saw this as a pleasing update.
Share buybacks are also expected to resume in 2026.