AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Rating of “aa-” (Superior) of Aviva Insurance Limited (AIL) (United Kingdom). AIL is a wholly owned subsidiary of Aviva plc (Aviva) (United Kingdom), the non-operating holding company of the Aviva group. The outlook assigned to these Credit Ratings (ratings) is negative.

The ratings reflect Aviva’s consolidated balance sheet strength, which AM Best assesses as very strong, as well as the group’s strong operating performance, favourable business profile and appropriate enterprise risk management. The ratings also reflect AIL’s strategic importance to and deep integration within Aviva as a leading provider of non-life insurance in the United Kingdom. AIL is the group’s main U.K.-based non-life insurer and principal contributor of non-life insurance services revenue.

The negative outlooks reflect pressure on Aviva’s balance sheet strength assessment predominantly stemming from deterioration in its risk-adjusted capitalisation following the acquisition of Direct Line Insurance Group plc (DLG). While Aviva expects to rebuild its solvency margin gradually as it unlocks new synergies and the additional diversification that is associated with the acquisition, this remains subject to execution risk. Should the group’s risk-adjusted capitalisation not improve to historical levels over the short to medium term, negative rating action may occur.

Aviva’s consolidated risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), was assessed at the strongest level at year-end 2024. Whilst remaining at the strongest level, Aviva’s BCAR scores declined meaningfully in 2024, partially driven by the return of capital to shareholders, through share buybacks and dividends, and are expected by AM Best to decrease further in 2025, negatively impacted by the acquisition of DLG. AM Best’s assessment of Aviva’s risk-adjusted capitalisation includes a meaningful contribution from economic capital embedded in long-term business and equity credit for hybrid debt, which are considered weaker elements of the group’s capital structure. While Aviva has a proven track record of excellent financial flexibility, the group’s debt leverage is considered by AM Best to be moderately high.

Aviva has a track record of strong operating performance through business cycles. For year-end 2024, the group reported profit after tax of GBP 0.7 billion, equivalent to a return on equity of 7.7%, benefiting from a well-diversified portfolio by product across life and non-life segments. Earnings have been supported by growth across protection, annuities and savings products, evidenced by growth in life new business inflows of 19% in 2024. Non-life underwriting performance remains a strong contributor to group profitability.

Aviva’s business is focused on its core markets of the United Kingdom, Ireland and Canada, where it maintains leading positions in several lines of business. The group’s business profile is well diversified by product, both in life and non-life insurance, and by distribution channel. The recent acquisition of DLG has enhanced Aviva’s market position further in the very competitive U.K. personal lines segment.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20251121812193/en/

Ben Diaz-Clegg
Associate Director, Analytics
+44 20 7397 0293
ben.diaz-clegg@ambest.com

Ghislain Le Cam, CFA, FRM
Senior Director, Analytics
+44 20 7397 0268
ghislain.lecam@ambest.com

Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
christopher.sharkey@ambest.com

Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
al.slavin@ambest.com

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