Dame Amanda Blanc

Today we’re announcing three key things.

First, that we have delivered another strong set of results in Q3, growing across the group. From General Insurance in the UK, Canada and Ireland…right through to our leading Wealth business.

This means we’re on track to meet our current 2026 Group financial targets at the end of 2025, a full year ahead of schedule.

We are set to exceed £2bn of operating profit and £1.8bn of own funds generation this year.

And, to be clear, these targets will be achieved before any contribution from Direct Line - a huge testament to the strength of the underlying Aviva business. I am incredibly proud of the team for such a fantastic achievement.

Second, the integration of Direct Line is already well underway, reinforcing our belief in the full potential of this deal.

So, we’re raising our expectations on the benefits that we will realise, increasing cost synergies to £225m - and confirming significant capital benefits of at least £500m.

The acquisition also accelerates our capital-light earnings strategy and we’re set to surpass 75% by the end of 2028. This is highly attractive for our shareholders – because it means that we are delivering stronger growth and better returns, using less capital.

And finally, but perhaps most importantly, we are raising our ambitions yet again with new three-year targets:

• We have a new operating EPS target of 11% through 2028.

• We are aiming to deliver a return on equity of greater than 20% by 2028.

• And we’re refreshing cash remittances, now with bigger ambitions of over £7bn.

So, to sum up:

Over the past five years, we have transformed Aviva and we are in a stronger position than ever today.

We are the UK’s leading diversified insurer, delivering a clear strategy and consistently strong performance for our customers and shareholders.

We’ve achieved a huge amount but as we enter this new chapter, we know there’s still much more to come from Aviva.

Steve Sedgwick: Amanda Blanc, who I'm delighted to say has joined us around the set, who is the CEO of Aviva.

Amanda, always lovely to see you.

Thank you for joining, Karen, Juliana and myself as well.

And I notice you've got your barbs into me already off air saying I don't know how the ladies put up with you, which is how I like it, as you well know.

Amanda Blanc: I know.

Steve Sedgwick: So Amanda, tell us about the numbers.

Amanda Blanc: Yeah, thanks for having me on.

So on the quarter numbers, strong trading performance, good growth in our general insurance business. Wealth flows up 8%, so you know really, really strong performance in the wealth platform, which is the biggest platform in the UK. We've got over £220 billion of assets.

But I guess the big news today, Steve, as you just said was you know the three things: we're going to close off our 2026 financial targets and we'll say that we will be achieving those targets one year early.

So that's £2 billion of operating profit and £1.8 billion of own funds generation.

And then having obviously had the opportunity to own Direct Line now for a few months, we're raising our ambitions on the Direct Line deal.

So we're increasing the cost synergies from £125 million to £225 million.

And we're also announcing for the first time the capital synergies, which everybody's been waiting for, of greater than £500 million.

All of that leads to a new set of group targets.

And so we're putting our targets on the same footing as our peer group.

So 11% CAGR as you said on the EPS, greater than 20% on the return on equity and over £7 billion of cash remittances.

So, you know we are, we're in such a good position, trading momentum is really, really good within the business and we're ready for the next chapter of Aviva I guess.

Steve Sedgwick: Yeah. And look, there's so much to ask you about and luckily I think you've been very generous. We're going to get you for about another 8-9 minutes as well.

Look, I've been studying Norwich Union for a long, long time now.

Amanda Blanc: Gosh, now you are going back in time!.

Steve Sedgwick: Exactly, and various CEOs all the way down the line.

One of the things that previous CEOs did, and funnily enough, as I said to you, I was chatting to a grandee of the insurance industry the other night about you and your ears would have been burning, and they said  Amanda's done a lot of the things that those previous CEOs should have been doing.

They simplified the business. They concentrated on the markets where you’re one, two or three and got rid of all those assets where you just weren't going to get scale.

Has that broader journey with the Direct Line completion, has that moved to a final phase or actually is it ongoing?

Amanda Blanc: So I think it's really interesting.

You know, I always believe that if you're one, two or three in the market, you've got a real opportunity to win and I think that really, really matters.

So you know, we've really focused on that.

We did a lot of the things as you said the previous people talked about. We sort of did the doing.

I do think that with Direct Line we now move our operating earnings to 75% capital light.

So, what does that mean?

It means less capital, better returns, more operating profit.

So it's a new stage of the journey and I think that we've been taking the business on the journey.

You know, if I reflect in 2022, the operating profit of the business was £1.35 billion and now you know we'll say it's £2 billion for the end of this year.

We've returned £10 billion to shareholders.

So with the share consolidation and with dividends.

So, I think that you know, it was all hidden in plain sight really, everything was there to be done.

You know a lot of people are good at producing PowerPoints, aren't they? You've got to actually get things done. I think.

Julianna Tatelbaum: When it comes to the integration of Direct Line, it seems like it is really going well when you look at what you've revised today, now expecting to achieve £225 million in cost synergies, nearly twice the original estimate.

What has gone better than expected and where are those synergies coming from?

Amanda Blanc: Yes, so first of all, I think you know, when we announced the £125 million that was a sort of accounting number, and we were going through the takeover process.

So that was a bit muted.

But actually, we have done better.

We've seen that there's more to be gained from the operational synergies, the head office synergies and also the technology synergies.

The capital number was one we didn't announce last year, but clearly what you're doing is you're bringing in a personal lines business into a wider general insurance business.

So you get a level of diversification benefit from the capital there and then you diversify with the life company and you get an additional diversification.

So, the synergy number is a brilliant number and that should be new news to the market today and it should surprise on the upside, we hope.

Julianna Tatelbaum: And you mentioned buybacks and how consistently you have been able to deliver cash back to shareholders.

How should investors think about buybacks now moving forward?

Amanda Blanc: Yes, so we basically have said, and we'll say in the announcement this morning, that we will return to the share buyback in March 2026.

And the share buyback will take into account the increased share count following the deal.

So you know, we have been doing regular and sustainable £300 million.

We paused it this year whilst we did the deal, and that will return, but also take into account the share buyback.

So you know, it's good news for investors.

And we've also added another 5% of the dividend to take into account the deal.

So our dividend policy was also enhanced, you know when we announced the deal last year.

Karen Tso: Amanda, let me turn to the macro and in the operating environment that you're facing right now because the data that has just landed this morning as we've kicked off the conversation suggests a slower pace of growth in the third quarter.  0.1 of a percent is the clip. In fact, the ONS is now saying for the third quarter GDP growth per capita was zero.

So no progress here.

Do you think it's just pre-market jitters or are you witnessing that there is a fundamental slowdown in the UK economy?

Amanda Blanc: So it's really interesting because I think what we see with the flows onto the wealth platform is good consumer confidence.

You know, people are saving, but insurance is an incredibly resilient business.

If you think about what we've been through over the last five years, the cost-of-living crisis, supply chain, inflation, COVID, the businesses continue to perform.

So people don't tend to stop saving, they don't tend to stop insuring their motor, their home, their businesses.

So I think that, you know, what we are seeing clearly is some nervousness.

So what we have seen in the last few months is people are ringing our contact centre and saying what should I do with my tax-free lump sum?

And we have seen a slight elevation in terms of some of the flows with people taking their tax-free lump sum.

Honestly, I believe that the 26th of November can't come soon enough.

I think, you know, every week we get a new view of what may happen with the budget.

That's not very helpful.

I don't think it's helpful for consumers, it's not helpful for businesses.

So I think it would be really good when we've got some certainty, because you can deal with certainty.

What you can't deal with is speculation.

Karen Tso: You've mentioned businesses and you've mentioned consumers in two different buckets.

And the reality is the weight of the fiscal position fell on businesses in some of the initial Labour Party measures.

Now we're talking about shifting that onus to consumers and the most painful measure being a high-income tax.

And that has well and truly been discussed at length before the budget.

If that was to, to pass an extra 2 pence, would that have consequences even for a resilient insurance business like yours?

Amanda Blanc: So I genuinely, actually, don't think so.

But, but obviously we're always conscious of what our consumers are going through.

But if you think about even the inflation numbers, you know, what they've seen.

[And as an aside], Steve was telling me about the increase in his motor insurance payment, which have reflected, and which is was always nice to discuss, obviously!

But, you know, I think that that the consumers have dealt with quite a lot over the last number of years.

What I would say is, what we need to make sure of is that in some of the measures, if you think about things like salary sacrifice, that is not just going to be an impact on employees, that's also an impact on employers.

So you could have a double impact should there be changes to the National Insurance charge on salary sacrifice.

So I think we've got to be very, very careful about the unintended consequences of measures in the budget.

And so we are really, you know, we're very keen to see what actually is going to happen.

Julianna Tatelbaum: What's your sense about the direction of travel of the UK economy with what's been floated that we could hear in the November budget? You just hit on some of the things that have been put out there. But are you optimistic generally speaking about the where the UK is headed?

Amanda Blanc: So, look, if we think about all the foundational things that you need to be optimistic, a government talking about growth, a strong regulatory backdrop, you've got some real changes in regulation, certainly for us on things like targeted support, which will help our business, Solvency UK, which will help our business, you know, all of these.

And then, you know, investment in infrastructure, which we obviously invest in, all of these should be things which should come together and produce a good outcome.

The pensions bill, planning reform.

I think the problem that we have is that everything is coming. You know, there's a little bit here, a little bit there.

What you need is to see this all joined together and to see what the actual impacts are going to be over the medium to longer term.

I think that vision of what all of that together means for the economy, means for you, us as consumers, us businesses, that's not there at the moment.

Steve Sedgwick: We had a conversation with the man you probably know, Clemens Jungsthöfel, who is the CEO of Hannover Re and we talked to him last week about increased risk and the modelling for that risk.

And of course, you know, the models are getting more and more sophisticated as we go on as well.

Do you have concerns that we are underestimating the amount of increase in risk to homes, to property, coming from climate and actually modelling for that is getting more and more difficult.

Amanda Blanc: So I think we've always said that climate is a risk too, I mean, if you think about insurance, we think about this all the time. I'm sure that's what that's what your guest was saying.

I mean, we are modelling for flood exposures.

If you think about the UK and in Canada, we're thinking about, hail, fire, flood, whatever, you know, you get all of these events.

We're constantly modelling on that basis.

We've got, you know, very many actuaries that spend all their time doing just that, Steve.

So I don't think it's a new thing.

I think we've always assumed, I mean, particularly if you think about the UK, the UK, as you know, is very, very prone to flood risk. It does not take much bad weather to create a flood event in the UK.

So we're always thinking about that.

But now I think we're thinking more about mitigation. It's not about stopping the risk, it’s about how do you build back better so that you're more resilient should these events happen.

Karen Tso: Let me ask the predictable AI question because there have been lots of concerns in the marketplace around valuation and that is based on some disappointment in the application phase.

So the question really is what business is doing with this tremendous technology, whether it's delivering returns and whether you see the value in it. How would you describe your adoption of AI and the benefits you're getting out of that investment so far?

Amanda Blanc: I'm amazed it's taken us that long to get to AI.

I mean, honestly, we're very excited about the opportunity with AI.

If you think about Aviva, we have nearly 25 million customers and we have, you know, a very many repeatable processes.

So if you think about AI, there's applications right across the business. Where we've seen the cases to scale up are in areas like claims summarisation where we're making the experience for the customer a lot easier, a lot quicker.

We've got that live with 500 claims handlers at the moment. And in areas of underwriting, so things like medical underwriting where we're taking very, very complicated doctor's note, consultant's note, and we're presenting it to underwriters to be able to make decisions, and we're saving 50% of the time of underwriting the risk.

If you think about those things and you compound them across Aviva, you know, one of the benefits of a diversified business is when you're putting AI investment into the business.

It's not just for one product, it's for very, very many products.

For Aviva we see that there is real opportunity and benefit.

Are we at that stage yet?

No, but are we in the scale up of some of those opportunities today?

Yes.

Steve Sedgwick: Amanda, I've read a lovely piece from Jonathan Moules and others at the FT about you.

I thought it was a very nice piece, but one thing there was an ex-Aviva executive criticised the lack of succession planning over at Aviva as well.

I know you're not going anywhere soon, I hope you're not going anywhere soon, but is that a criticism which you take lightly or quite seriously or how do you feel about that?

Amanda Blanc: Look, I think it's total rubbish.

If I look at my ExCo, I have got, and I will say this, you know, to them all the best ExCo that there is in the insurance industry and I've got really strong CEOs in each of the businesses.

So I mean, I thought it was interesting and I thought it might actually be an ex-Aviva executive, but who knows?

There are a few of those.

Steve Sedgwick: And so what I loved when you said you're not one of those chummy Leadenhall Market club people as well, although one of those chummy Leadenhall market people club the other day said some very nice things about you to me as well.

We always love speaking to you.

Thank you for your candid answers and well done, you know, with everything that's going on, it's great.

Dame Amanda Blanc, who is the CEO of Aviva.