UK insurer Aviva beats earnings forecasts on rising home and car prices

British insurer Aviva beat profit expectations for the first half of the year following a rise in non-life insurance premiums in Britain and Ireland and said on Wednesday it remained confident it would meet its 2026 targets.

The life and general insurer, whose main businesses are in Britain, Canada and Ireland, posted a 14 percent rise in operating profit to 875 million pounds ($1.12 billion), beating analysts’ average forecast of £830 million.

It saw a 15% increase in non-life premiums overall, with an 18% increase in the UK and Ireland.

Aviva set three-year targets last year, including achieving an annual operating profit of £2bn by 2026.

Insurers have faced criticism for raising car and home insurance premiums. They say this is due to inflation and supply chain issues in the wake of the COVID-19 pandemic and the war in Ukraine, with weather losses adding to pressure on home insurance prices.

The auto insurance market has been “super competitive and very dynamic,” chief executive Amanda Blanc said on a media call.

“I don’t think the industry can be blamed for profit.”

However, Aviva’s pension sales fell 6% to £3bn due to lower equity release mortgages and sales of bulk annuities, insurance for corporate pension schemes.

Aviva said it would continue to look at “targeted mergers and acquisitions” following recent deals such as U.S. insurer AIG’s purchase of U.K. life insurer AIG.N.

Blanc told the press call that the insurer will launch a long-term asset fund for unlisted stocks in the second half.

Aviva is one of the signatories to the UK’s ‘Mansion House Compact’, where insurers and pension funds voluntarily commit to invest 5% of their defined contribution pension schemes in non-listed companies by 2030.

Aviva shares were down 0.3 percent at 0732 GMT, compared with a 0.5 percent rise in the FTSE 100 .FTSE.

The company said it would pay an interim dividend of 11.9 pence per share, up 7% and in line with forecasts.

($1 = £0.7796)

(Reporting by Carolyn Cohn, editing by Lawrence White and Mark Potter)

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