@Malcolmxl5 via Wikimedia Commons.
Aviva, arguably the UK’s largest insurer, released its Q1 results last week, where it specified that its merger with Direct Line was on track and no difficulties were expected despite recent interest by the UK competition watchdog.
“Aviva has got off to a great start in 2025,” said Amanda Blanc, Group CEO, in its statement. “We continue to trade strongly, growing profitably right across the group, and demonstrating the resilience of our business in a period of market volatility.
Aviva had positive, if uninspiring, 2024 full-year results, which it revealed in February.
"Our balance sheet is strong, and our businesses are growing well,
especially in capital-light areas.”
“Aviva has leading positions in growing markets, and we have seen excellent trading in a number of areas.”
Blanc said that Direct Line shareholders voted overwhelmingly in favour of the transaction and that Aviva expected to complete the deal in the middle of the year.” The acquisition of Direct Line is firmly on track,” she said.
“We continue to be positive about the outlook for 2025. Our balance sheet is strong, and our businesses are growing well, especially in capital-light areas.”
General Insurance premiums were up 9% to £2.9 billion compared to Q1 2024, where they stood at £2.7 billion.
Q1 trading results across Europe and North America have been unusually frank. Many have discussed the volatility resulting from the Los Angeles wildfires and the US government's moves that have led to market volatility.
Several speciality and mid-sized UK insurers have been specific about fluctuations in their portfolios. Hiscox said its investment result for the first quarter was $114.1 million compared to Q1 2024 results of $66.9 million, or a year-to-date return of 1.4%.
“In the wake of the US government announcing a range of tariffs
in April, market volatility has significantly increased."
The Group invested assets as at 31 March 2025 were $8.5 billion - $8.2 billion for full-year results in 2024. At 31 March 2025, the Group's bond portfolio reinvestment yield was 4.5% with a duration of 1.8 years. The fixed income portfolio remains conservatively positioned, with an average credit rating of 'A'.
“In the wake of the US government announcing a range of tariffs in April, market volatility has significantly increased, with two-year government bond yields fluctuating, spreads widening and equity markets falling,” said the press statement. “Hiscox's investment portfolio has remained resilient through this period as rate moves have helped to offset a widening of credit spreads and the impact from equity markets has been limited given the Group's relatively low exposure to this asset class. While continued volatility is anticipated, the Group's short duration and high-quality fixed income portfolio means that Hiscox is well positioned.”
Beazley also released its results earlier in the cycle. Insurance written premiums increased by 2% to $1.51 billion from $1.48 billion in Q1 2024.
The company saw an investment income of $136 million or 1.2% year-to-date. In Q1 2024, investment income was $126 million or 1.2%.
“As expected, markets softened in the first three months of the year and we maintained our focus on strong underwriting discipline whilst navigating those conditions,” said Adrian Cox, Chief Executive Officer at Beazley.
“Looking ahead, it is likely that financial market volatility
will remain for some time.”
“Our guidance for the year of mid-single digits growth and an undiscounted combined ratio of mid-80s is unchanged,” he said. “We are well positioned to take advantage of any opportunities which may arise, as pricing dynamics evolve in this active claims environment."
Beazley added that elevated uncertainty driven largely by the trade policy announcements from the US administration in February and March led to “increased volatility and declines in equities, and to a lesser extent, corporate bonds” in its portfolio.
“Short-dated US risk free yields fell, supporting asset values,” it said. “Looking ahead, it is likely that financial market volatility will remain for some time.”
It added that the company’s investment portfolio is well diversified and allocated “relatively conservatively”, hence “able to withstand the current market environment”.
As at 31 March, the average yield of its fixed income investments is 4.4% with an average duration of 1.6 years.
