British insurer Aviva beat first-half profit expectations following a rise in general insurance premiums in Britain and Ireland, and said on Wednesday it remained confident of meeting its 2026 targets.

The life and general insurer, whose main businesses are in Britain, Canada and Ireland, posted a 14 per cent rise in operating profit to £875 million (€1 billion), above analysts’ average forecast of £830 million.

It saw a 15 per cent rise in general insurance premiums overall, with an 18 per cent rise in Britain and Ireland.

Aviva set out three-year targets last year, including to achieve annual operating profit of £2 billion by 2026.

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

The motor insurance market was “super competitive and it’s highly dynamic”, chief executive Amanda Blanc told a media call.

“I don’t think that the industry can be accused of profiteering.”

However, Aviva’s retirement sales fell 6 per cent to £3 billion due to a drop in equity release mortgages and in sales of bulk annuities, insurance for corporate pension schemes.

Aviva said it would continue to look at “targeted M&A” following recent deals such as its purchase of US insurer AIG’s UK life insurance business.

Blanc told the media call that the insurer would launch a long-term asset fund for unlisted equity in the second half.

Aviva is one of the signatories of Britain’s “Mansion House Compact”, in which insurers and pension funds voluntarily commit to investing 5 per cent of their defined contribution pension schemes in unlisted companies by 2030.

Aviva shares were down 0.3 per cent in early morning trading, compared with a 0.5 per cent rise in the FTSE 100.

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