While the business did not give specific figures for its equity release business volumes, its retirement sales, which include annuities and equity release, totalled £1.8bn in Q1, a 4% increase on the year before.
The value of new business sales within its retirement division was £63m, a 28% rise on the £50m generated last year. Aviva said these reflected higher volumes of small schemes in bulk purchase annuity.
Boost in protection business
It said an 18% increase in protection sales to £89m, reflecting the acquisition of AIG, which completed in April last year.
Its insurance business, comprising protection and health, rose by 169% annually to £126m. The value of new insurance business was 14% higher at £64m, attributed to a growth in sales.
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Within this, individual protection sales increased by 28% to £47m, while group protection sales were 10% higher at £47m.
Looking forward, Aviva said it expected more growth in its health business, with an aim of £100m operating profit in 2026. It said growth from the AIG acquisition would moderate and profits would merge over time.
Intermediated business drives up insurance premiums
Aviva said its general insurance personal lines premiums rose 6% to £945m, owing to a growth in intermediated business. The company also attributed this to its travel partnership with Nationwide, adding that retail premiums were consistent with the previous reporting period.
It said it continued to “remain focused on pricing appropriately to maintain the strong rate adequacy of the book”.
Its overall general insurance premiums, including personal and commercial lines across the UK, Ireland and Canada, came to £2.9bn, a 9% rise on the year before.
A good start to the year for Aviva
Aviva said its plan to pivot Aviva to a more “capital-light business” continued to deliver, and it was already mostly capital-light with 56% of operating profit. It said the acquisition of Direct Line would take this beyond 70%.
This week, the Competition and Markets Authority (CMA) announced it was investigating the merger, which was confirmed at the end of last year.
Amanda Blanc, group chief executive at Aviva, said: “Aviva has got off to a great start in 2025. We continue to trade strongly, serving our customers well, growing profitably right across the group, and demonstrating the resilience of our diversified business in a period of market volatility.
“Aviva has leading positions in growing markets and we have seen excellent trading in a number of areas. General insurance premiums increased by 9%, with strong performances in both personal and commercial insurance, including a travel insurance partnership with Nationwide and the benefits of acquiring Lloyd’s insurer Probitas.”
She added: “In retirement [division], our investment in the business and higher interest rates are driving growth in individual annuities, where we increased sales by 32%. We also continue to see high levels of interest in health insurance and we grew sales by 19% with strong demand from consumers and employers.
“The acquisition of Direct Line is firmly on track. Direct Line shareholders voted overwhelmingly in favour of the transaction and we expect to complete the deal in the middle of the year. We continue to be very positive about the outlook for 2025. Our balance sheet is strong, we have a clear customer-focused strategy, which we continue to deliver at pace, and our market-leading businesses are growing.”
Aviva still expects to meet the targets set out in its full-year 2023 results, including £2bn in operating profit by 2026.
