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Profits at Aviva rose for the fifth time last year, boosted by a surge in revenue from premiums as FTSE 100 Group prepares to close the £3.6 billion acquisition of its small rival direct line.
The UK insurer reported operating profit of £1.777 million for the fiscal year ending December, compared to the £1.7 billion analyst forecast.
The rise saw a 14% increase in general premiums to £12.2 billion, while Aviva’s Wealth Business received a net inflow of £10.3 billion. The group’s shares rose 1.6% in early trading on Thursday.
The update came in a partnership set to dominate the UK auto and home insurance market after Aviva agreed to buy the Rival Direct Line in December. On Thursday, Aviva said Transaction still needs to require regulatory sign-offs and approval from Direct Line shareholders, and is expected to be completed in the middle of this year.
Aviva previously said it could save £125 million each year within three years of completing the acquisition. The acquisition is expected to reduce employment by up to 2,300 people. On Thursday, he said that more “material” cost savings will emerge over time.
The insurance company has confirmed its target of providing £2 billion in operating profit by 2026, but said it will reconsider the target once the direct line acquisition is complete. This added that buybacks, which were suspended this year while the transaction was completed, will resume next year.
