Aviva has stated that it is set to reach its 2026 financial targets a year earlier than anticipated in its Q3 results.

The insurance firm now expects to deliver an operating profit of £2.2bn in the current full year, after setting a £2bn target for the 2026 financial year.

Of this amount, its integration with Direct Line is set to contribute £150m.

Aviva said these results have been driven by an exceptional performance across the group and before any Direct Line contribution.

The company also stated that its original £100m Direct Line cost reduction programme has been completed three months early.

Group chief executive officer at Aviva, Amanda Blanc, said: "Over the last five years we have transformed Aviva, delivering again and again for our customers and shareholders. We continue to make excellent progress and now expect to achieve our financial targets in 2025, one year early. Crucially, we have achieved this significant milestone thanks to the consistently strong performance of Aviva, before any impacts of the Direct Line acquisition are included.

"The integration of Direct Line is well underway and we are increasingly confident of reaping the full benefits of this acquisition, contributing materially to Aviva's future growth and shareholder returns."

Following the latest results, Aviva has launched its group targets for the 2025 to 2028 financial period, which reflect the firm now and going forward.

Its operating earnings per share compound annual growth rate is set to increase by 11% in this period, while its return on equity is set to increase by 17% in 2025 and is targeting 20% by 2028.

From 2026 onwards, it has retained its guidance for mid-single digit growth in the cash costs of its dividend, and expects to reintroduce regular and sustainable returns of capital alongside its full year 2025 results in March.

Following the update, shares in Aviva dropped by around 5%, which senior equity analyst at Hargreaves Lansdown, Matt Britzman, described as a "harsh reaction" to a "solid set of results".

He concluded: "Management raised targets, accelerated timelines, and gave investors a clearer path to buybacks, all while showing good progress on integrating Direct Line. Cost savings are well ahead of expectations at £225m and a chunk of capital, to the tune of £500m, is expected to be freed up by 2026. That matters because freeing up capital should help restore solvency levels faster post-acquisition and bring buybacks back into play sooner - a clear positive for shareholders.

"For now, Aviva’s diversified model and capital-light tilt provide resilience, and the raised targets underline confidence in that strategy. Investors will likely welcome the mix of operational progress and capital return signals, even as the market keeps an eye on pricing trends and Direct Line execution."

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