REAL-TIME GLOBAL RESEARCH
Aviva plc: In Focus - Wealth: strong growth ambitions will shift this to >1/3rd of UK life profit by 2032
Key takeaways
- In Focus - Wealth: strong growth ambitions will shift this to >1/3rd of UK life profit by 2032 Our Take: Aviva’s announcement this morning, ahead of its In-Focus event on the UK Wealth business, suggests a stronger growt
- Street estimates are not clear, with Bloomberg consensus suggesting its targets are largely in line with this growth trajectory based on a low sample, but Visible Alpha consensus suggesting these targets are ahead of ana
- Importantly, we think this growth trajectory will result in UK Wealth becoming a larger proportion of the Aviva’s UK life operations, from 16% of UK life profit (and 7% of Group operating profit) to ~1/3rd of UK life pro
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Research evidence excerpt
In Focus - Wealth: strong growth ambitions will shift this to >1/3rd of UK life profit by 2032 Our Take: Aviva’s announcement this morning, ahead of its In-Focus event on the UK Wealth business, suggests a stronger growth and profit trajectory than our current estimates for Wealth, with a >£500mn operating profit target for 2032 suggesting >12% CAGR in profits for this division (JPMe: 11% CAGR 2027-30).
Street estimates are not clear, with Bloomberg consensus suggesting its targets are largely in line with this growth trajectory based on a low sample, but Visible Alpha consensus suggesting these targets are ahead of analyst forecasts. Importantly, we think this growth trajectory will result in UK Wealth becoming a larger proportion of the Aviva’s UK life operations, from 16% of UK life profit (and 7% of Group operating profit) to ~1/3rd of UK life profit (and >10% of group profit) by 2032.
This continues the transformation of Aviva into a diversified capital-light focused composite insurer and, in our view, deserves a higher valuation multiple. We reiterate our Overweight rating on Aviva.
Specialist Sales contact details:
- Double-digit growth expected for the UK Wealth market. Aviva suggests that the UK Wealth market (net flows and asset growth) is expected to grow at >10% p.a., with the asset pool reaching £7.5trn and the associated profit pool of ~£10bn.
Gigi Sparling - Specialist Sales European Financials
- Strong progress in the Wealth business. Aviva is the #1 Wealth player in the UK (including Workplace pensions), with £261bn in assets and nearly 6mn Wealth clients. Its Wealth business has been supported by Workplace pensions and Adviser Platform where it has a scale benefit. Aviva tends to deliver further organic growth through expanding Direct Wealth, Advice and Targeted Support propositions.
- New Wealth guidance by 2032. Aviva aims for >£500mn operating profit in Wealth by 2032, suggesting a >12% CAGR over 2027-2032 which appears to be higher than JPMe at ~11% over 2027-30.…
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