Aviva Canada posted a combined ratio of 93% for the first half of 2026, an improvement of 1.7 percentage points from the same period last year.
The combined ratio tracks how much an insurer spends on claim payouts and operating expenses against every dollar taken in from premiums. Any score below 100% represents an underwriting profit. Aviva Canada spent 93 cents to cover costs for every dollar brought in, leaving 7 cents in profit per dollar.
Total general insurance premiums grew 3% to £2.18 billion. Operating profit for the Canadian business rose 22% in constant currency to £262 million for the six months ending June 30, up from £218 million in the first half of 2025.
The strong overall result came from personal insurance, such as everyday driver collision and home policies. The personal lines combined ratio improved 3.3 percentage points to 92.5%. Premiums in this category grew 4% to £1.40 billion, helped by rate increases on auto and home accounts, lower weather losses, and favorable claims adjustments from prior years.
Commercial business insurance went the other direction. The commercial combined ratio rose 1.3 percentage points to 94.0%, narrowing profit margins. Commercial premiums grew 2% to £779 million, but a string of large property damage claims and soft market pricing reduced profitability.
The shift in commercial margins reflects a growing tension in the commercial market. When rates soften, carriers face two choices: maintain rates based on actual risk selection—accepting short-term top-line drag—or underprice policies to keep premium volume growing. The second approach often leads to severe capital drain two or three years later when underpriced claims finally materialize.
Aviva Canada took a similar path in 2025, when commercial premiums fell 5% as the company deliberately walked away from unprofitable accounts. Sticking to strict pricing instead of chasing total sales volume will be the main test for management if soft market conditions persist into 2027.
Aviva plc kept its full-year guidance for the Canadian business unchanged, projecting a full-year combined ratio close to 94%. Management noted that second-half financial health will depend heavily on wildfire and severe weather claims during the third quarter.
At the group level, parent company Aviva plc reported a 24% increase in operating profit to £1.33 billion for the first half of 2026, up from £1.07 billion in H1 2025.
"Aviva's results in the first half of 2026 were very strong," said Group Chief Executive Officer Amanda Blanc in the official earnings release. "We have now achieved six consecutive years of excellent financial performance, with much more to come."
