Aviva posted an above-forecast rise in first-half operating profit on Wednesday (Aug 16), helped by strong performance in general and health insurance, and its chief executive said the insurer was interested in entering the Lloyd’s insurance market.

The life and general insurer, which has businesses in Britain, Canada and Ireland, said it expected to exceed its medium-term growth targets.

Inflation and supply chain issues following the Covid-19 pandemic and war in Ukraine have led to an increase in insurance premiums, particularly in commercial insurance.

Commercial insurance makes up about 50 per cent of Aviva’s general insurance business, CEO Amanda Blanc told a media call.

“We are getting the benefit of a strong rating environment across all lines of business,” she said.

“We have priced for inflation probably ahead of the rest of the market.”

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Blanc said Aviva was looking at acquisitions in commercial insurance, adding that the Lloyd’s of London commercial insurance market was “something that we have looked at...an area that we are certainly interested in”.

Operating profit rose 8 per cent to £715 million (S$1.23 billion), above analysts’ forecasts of £701 million. Aviva estimated full-year 2023 operating profit growth of 5-7 per cent.

Aviva’s shares were up 1.4 per cent at 0713 GMT, making it one of the top performers in the FTSE 100. KBW analysts said there was “little to grumble about”, reiterating their “market perform” rating on the stock.

The company said it would pay an interim dividend of 11.1 pence, up 8 per cent and against a forecast of 11 pence. Rival motor and home insurer Admiral cut its interim dividend by 15 per cent on Wednesday.

Aviva’s general insurance operating profit rose by 29 per cent to £470 million, reflecting strong performance in its main markets along with higher investment income.

Sales in private health insurance rose by 58 per cent for both individual and corporate customers, with Aviva pointing to pressure on public health services helping to drive demand.

But profits in the insurer’s wealth and retirement business dropped 13 per cent to £436 million following additional investment in its wealth unit.

Aviva Investors saw external net inflows of £190 million. REUTERS