Good news has been in short supply for investors this year, but Aviva is becoming better at confounding the market’s (admittedly low) expectations. Higher annuity volumes, cost-cutting and sturdy underwriting pushed the insurer’s operating profits up by 14 per cent during the first half of the year, beating consensus forecasts. Yet it is the sniff of more special returns that has caught the market’s attention.
Rising interest rates and robust capital generation from within the business have left Aviva with a Solvency II capital ratio of 234 per cent. That metric falls only to 213 per cent even after accounting for another £1 billion in debt repayments and funding the acquisition of Succession Wealth.
The company deems anything over 180 per cent as excess that
