Aviva Stock

Okay. Good morning, everyone, and thank you for joining us today for our half year results presentation. I'm going to start by sharing a few key highlights before Charlotte takes you through the results in more detail. Then we'll cover why we are so confident in Aviva's long-term potential. And as always, we will open for questions.

So let me begin with the key messages. Aviva has delivered another excellent performance in our first half of 2026, once again extending our track record of strong profitable growth. We continue to accelerate towards 75% capital-light, unlocking the potential of Direct Line and building further momentum in our #1 Wealth business. All of this underpins our confidence in delivering the ambitious 3-year targets. And our diversified model is a key enabler for long-term success, which is why I am equally confident in our ability to the sustain strong earnings growth well beyond 2028.

Now let's get to the results. As you can see, it's been a great first half. Operating profit is up 24%, with strong double-digit growth in operating earnings per share. And we are driving higher returns with IFRS return on equity above 20%. For shareholders, we completed the latest share buyback last month. And today, we are announcing an interim dividend of 14p per share, up 7%. We are also stepping up for our 25 million customers. We're serving more of their needs than ever and delivering a fantastic customer experience. These results reflect strong delivery right across our business and our excellent progress on Direct Line.

Behind every number in these results is a colleague making a difference for customers. I've been really fortunate to work with many talented teams throughout my career. And I genuinely believe that Aviva has the best people in the industry. Because we are the leading player, we attract and retain some of the best talent. And I'd like to thank the team for their commitment, skill and hard work and for everything that they do to deliver for our customers and shareholders every single day.

Turning now to our track record. Over the last 2 years, we have transformed Aviva. Year after year, we have delivered consistent growth, stronger profitability and higher returns. And we have exceeded two full sets of targets along the way. Today's results build on that track record and keep us firmly on course to deliver our 3-year targets and create value well beyond them. So before I hand over to Charlotte, let me pause on why we are so confident about Aviva's potential. The answer is simple. It's the strength of our model. We have a diversified range of businesses with leading positions in attractive markets. That gives us earnings resilience and plenty of growth opportunities, which no other U.K. insurer can match. And as we continue to shift towards capital-light, we are generating even stronger returns.

We have a real customer advantage with a leading franchise in U.K. Financial Services, the #1 trusted brand and a broad range of products that meet customer needs. That means we have a real opportunity to do more for our customers who already choose Aviva. We have scale with game-changing amounts of proprietary data and strong technology and digital foundations. And this means we have a significant AI opportunity where we are already making progress. These are powerful strengths in their own right, but what really matters is how they come together. That's why we are so confident in Aviva's opportunity ahead, and I'll come back to share more on how we are thinking about that a bit later.

But first, let me hand over to Charlotte to take you through the results in more detail.

Thanks, Amanda, and good morning, everyone. The first half of 2026 was strong for Aviva once again as we continue our growth momentum. Operating profit was up 24% to GBP 1.3 billion, which translates to an operating EPS growth of 10% and an IFRS return on equity of 20.3%. Cash remittances were up 47% to GBP 1.5 billion. Our solvency ratio of 176% is towards the top-end of our working range, and we expect it to be in the high 180s by the end of the year. Underlying operating capital generation increased 14% to GBP 812 million, and within the businesses, our General Insurance combined ratio improved 1.3 points to 93.3%, and Wealth net flows were up 32% to GBP 7.6 billion.

I'll now unpack the results in a bit more detail business by business, starting with General Insurance. In the U.K. and Ireland, premiums grew 42% to GBP 5.9 billion. Now a large component of this was the addition of Direct Line reported as part of U.K. Personal Lines, where we saw premiums nearly double in size. And we've made great progress on the integration and performance turnaround of Direct Line. Written margins are improving, and we have returned to policy growth in Motor PCW. Commercial Lines trading in Q2 was a clear improvement on Q1. We traded well in a tough environment with strong April renewals. Premiums were down just 1% in the discrete quarter.

Now let me give you a little more color. Mid-market is up 1% year-to-date, benefiting from high retention, which is close to 90% and strong new business. Digital improved on Q1, but is still a little lower than last year. And we continue to take deliberate portfolio actions on certain MGAs. Probitas, which we are rebranding to Aviva Syndicates, continues to grow, largely driven by the 9 new classes that we have launched in [ Lloyds ] since the acquisition. And in GCS more broadly, Q3 trading was significantly improved, though as expected, year-to-date premiums are lower as conditions remain competitive. In terms of profitability, the U.K. and Ireland combined ratio is a strong 93.4%. This is a 1.1 point improvement, reflecting the earn-through of pricing discipline along with some favorable weather and prior year development. Overall, operating profit for the U.K. and Ireland grew 50% to GBP 643 million.

Premiums in Canada were up 3% in constant currency. Within this, Personal Lines were up 4% as we secured pricing increases across Property and Auto despite lower volumes due to the impact of portfolio actions taken in Alberta during the second half of 2025. We also continue to make good progress with the partnership that we announced last year with President's Choice Insurance. Commercial Lines grew 2% due to some scheme wins within GCS, which more than offset the softer rating environment. And the undiscounted core was almost 2 points better, reflecting better weather experience compared with the elevated CAT activity in the previous year. So first half operating profit was up 22% to GBP 262 million. And we continue to invest in our technology and our supply chain through a combination of in-sourcing and deepening partnerships to increase performance.

Now while first half weather experience was favorable, you'll have seen in the news since the end of June, there have been a lot of -- there have been a number of weather events across Canada. And although it's still early days, we now expect to be above our weather budget for the quarter. That said, Q3 is typically the more active CAT season, and so it's built into our expectations. Now looking at the group overall, we've made fantastic progress improving our headline undiscounted COR by more than 2 points over the last 2 years, and we're on track for our full year 2026 guidance. Now I want to take a moment to unpack our COR development and outlook for you. Structurally, we expect favorable PYD going forward, driven by the IFRS risk adjustments and maintaining balance sheet strength.

So taking these in turn, firstly, the risk adjustment increases the reserve amount through underlying COR and subsequently unwinds through PYD. Now while these effects largely net off in the headline COR, they contribute both to a favorable PYD and a structurally higher underlying COR by around 1 point to 2 points. Secondly, in terms of balance sheet strength, we reserve the best estimate, but that is still a range. So given ongoing uncertainty from inflationary dynamics to geopolitical tensions and of course, the addition of Direct Line, we are reserving towards the upper-end of this best estimate range, and we have maintained this strength over the period. But by maintaining balance sheet strength, favorable PYD is expected to come. On top of these recycling effects in the first half of 2026, there has also been some favorable experience on prior year claims and weather, benefiting the headline COR. And the underlying COR was negatively impacted by some large losses and other one-off effects. Our strong pricing, growing operating leverage, significant direct line opportunities and robust balance sheet give us confidence in the outlook.

Now moving to Insurance, Wealth and Retirement, starting with Wealth, where we are the largest player in the U.K. and have reached over GBP 260 billion of assets. Net flows increased by an excellent 32% to GBP 7.6 billion, representing 7% of opening AUM on an annual basis. This was driven by strong performance across the board. Workplace net flows up 36% with continued regular contributions of more than GBP 1 billion each month. We're also on-boarding new schemes, including GBP 1.5 billion from the first of the Mercer schemes. Our adviser platform performed strongly with net flows up 17%, including high demand for the onshore bonds that we launched last year. And in Direct Wealth, our customer base grew by almost 1/3 to nearly 120,000 customers with strong growth coming from across Aviva's existing customer base. AUM in our Direct business is up 14% to GBP 5 billion, and we continue to invest in developing this proposition to drive organic growth.

Overall, Wealth operating profit was up 34%, with our operating margin improving by 0.7 basis points as the business grows. We have the benefit of a leading scale -- sorry, leading scale, lifetime offerings and customer opportunities, and we are fully on track to meet our ambition of GBP 280 million of operating profit by 2027.

Now moving to our Insurance businesses, starting with Health. In-force premiums were up 5%, and we maintained a low 90s score. Operating profit was up 28% to GBP 37 million. Now the market has been affected by slowing growth, driven by the SME and consumer channels. 2 growth is down from about 6.5% back in 2023 to less than 2% in the first quarter of this year. And as a result of this, we now expect operating profit to be around GBP 90 million for 2026. So despite continued double-digit profit growth over the last 3 years, this will fall slightly short of our aim to reach GBP 100 million this year. We continue to see Health as a critical part of our customer proposition with long-term growth drivers.

In Protection, sales were up 1% with stronger performance in Group Protection. Margins have also improved by 40 basis points as we focus on delivering value. Protection operating profit was 14% lower, driven by adverse experience variances and investment in the business. And lastly, we're making further investments across both these businesses. For example, we're pleased to launch -- we were pleased to launch our new well-being proposition, which is a combined Health and Protection Solution for large corporates with SME to come later this year.

In Retirement, we wrote GBP 1.1 billion of BPA in a less active and more competitive market. Trading has been positive since the end of June and year-to-date volumes are now GBP 1.9 billion. The half year, we achieved an IRR of 18%, well above our low teens guidance, supported by our pricing discipline and mix of smaller schemes with higher returns. This business has also been written at relatively low capital strain, and we have provided some color on the IRR calculations in the appendix to the slides. Individual annuity sales were up 11% to GBP 865 million, supported by the launch of our new Guaranteed Fixed Income plan last year. Operating profit was up 2% as we benefited from higher CSM releases and asset optimization. We remain active in Retirement and we'll continue to be disciplined in the competitive environment.

Now turning to costs and efficiency. The ratios have improved across the group due to acquisitions, growth in the business and our focus on efficiency. For example, our cost-asset ratio in IWR has improved by more than 4 basis points over the last 12 months alone, demonstrating strong operating leverage. We are seeing benefits from the modernization programs as well as greater use of digital customer service. And we continue to invest in growth and productivity initiatives that will deliver real impact across the group, including, of course, the use of AI and automation. We expect this investment to improve operating leverage and unlock significant long-term value from our existing customer base and extensive data assets.

Now our consistent capital allocation framework is a critical part of what we do to optimize our diversified group. This slide, I come back to at each results as it summarizes how we think about our performance and financial strength and what that means for how we use capital. We are continuing to build sustainable growth in earnings and cash and maintain balance sheet strength. This is allowing us to grow the regular dividends and invest in the business for growth and efficiency. And we are returning capital to shareholders with our latest share buyback recently completed. Nothing is new here, but it's important that you can see we do this exceptionally well. Now one of the advantages of the model is we have built -- we have -- one of the advantages of the model we have built is proactive balance sheet management. At full year 2025, our shareholder cover ratio was 180%. In the first half, operating capital generation added 9 points, a little higher than normal because of the lower capital strain on BPA, some benign weather and of course, the benefits from Direct Line. It also includes about 1 point of management actions.

Nonoperating items reduced solvency by around 3 points, comprising 1 point from integration and restructuring and 2 from market movements. After debt actions, the dividend and buyback, our half year cover ratio is 176%. Now looking forward, we're confident in reaching high 180s by the end of the year, subject, of course, to market movements. And this guidance includes the benefit of at least 7 additional points or GBP 350 million from the expected Direct Line capital synergies.

Now Amanda will speak about AI again shortly, but I wanted to talk briefly about this in the context of investing in the business. Our business as usual change investment is GBP 450 million each year across the group for growth, customer and efficiency. And we're allocating increasing amounts of this budget towards AI, taking a disciplined approach by applying strict return thresholds, monitoring costs and focusing on the opportunities that can be scaled across the group. We aim to unlock benefits quickly in key areas and deploy these savings by either reinvesting them in new opportunities, factoring them into trading decisions or realizing them in the bottom line. There's significant potential here, which we are really well placed to unlock.

So before I hand back to Amanda, let me close with the outlook. I've already shared some of the details, so let me just pick up on a few points here. The Direct Line integration is going really well, and we expect cost synergies to reach GBP 130 million this year, which will flow through fully next year. Wealth momentum continues with the next material transfer of Mercer Master Trust assets expected in Q4. Now group operating profit in the first half was strong, and the second half will continue to benefit from many of the same drivers. But of course, that needs to be balanced against some of the other effects, including the CAT impacts in Canada.

So as a result, we expect full year operating EPS to be around 11%, slightly above the 2026 guidance we gave you last year and broadly in line with current market estimates. So to conclude, this is a business that is performing strongly. Our people are engaged and focused, giving me great confidence in the trajectory towards our 2028 targets. And with the opportunities that Amanda will cover now, I am equally confident in our sustained longer-term growth.

And with that, back to you, Amanda.

Okay. Thanks, Charlotte. So these results are testament to everything that we have delivered over the last 6 years, executing our clear strategy, delivering year-on-year and accelerating with targeted M&A. And that is why we are on such a strong trajectory. And what I want to focus now on where we go from here.

So we think about Aviva's future across two horizons. The first is our 3-year targets. We have real confidence in these as we unlock material benefits from Direct Line and drive strong organic growth across the group. The second horizon is over the longer term. Here, we see clear upside from serving even more customer needs, Aviva's AI opportunity and our material growth platforms. So let me take you through each of these horizons in turn, starting with our 3-year targets.

Realizing the benefits from Direct Line is a critical part of our plans. For customers, we continue to deliver excellent service, and we are pleased with the retention levels that we are seeing. On the people front, we officially welcomed 8,000 Direct Line employees as Aviva colleagues as we completed the [indiscernible] process. And we continue to rightsize and strengthen the combined business as the integration progresses. We have transferred almost GBP 5 billion of assets to Aviva Investors, improving the investment returns and reducing external fees. And we have moved to a single claims function, realizing the benefits of shared capabilities, data and scale. So we are well on track for all of our synergy ambitions. We have already delivered GBP 100 million of run rate cost synergies and GBP 150 million of capital synergies and GBP 40 million of annual claims cost savings, and there is more to come in the second half.

Turning now to Direct Line Motor performance. Beyond the integration, Owen and the team are doing a fantastic job here. We were not happy with margins on day 1. So we took immediate action on rate. We also rolled out Aviva's pricing models and combined data sets and the results are clear. Written combined ratios have improved by more than 10 points, and Direct Line is an important contributor to the strength of today's Personal Lines results. We have accelerated the rollout of Direct Line Motor brand on all 4 major comparison websites. Policies here have increased almost tenfold over the last 12 months to around GBP 0.5 million without weakening the broader book. Overall, PCW new business share is now at the highest ever level. Aviva already had first-class capabilities across pricing, underwriting, distribution and claims. This turnaround is all about embedding that experience at scale. So Direct Line is supporting our capital-light strategy, strengthening our position in a key market and delivering material shareholder value. It's a great example of how we are taking a disciplined approach to M&A.

But it's not just about Direct Line. Organic growth is another driver of our current 3-year targets, and Wealth is a great example here. Doug and the team have doubled the profit since 2019. And as you heard earlier from Charlotte, momentum is stronger than ever. We delivered GBP 7.6 billion of net flows, which is up more than 30%, driven by all parts of the business. To put that into perspective, it's almost as much as our full year net flows in 2023. And over the last 12 months, we have grown by almost 300,000 customers across Workplace, Advice and Direct. All of this is down to our strategic progress and targeted investment across the board. Enhancing our Master Trust proposition in workplace is why we are now the exclusive partner for Mercer. This will bring GBP 8 billion worth of assets.

In Adviser platform, our onshore bond has attracted GBP 700 million of flows since its launch. In Direct Wealth, over 70% of sales are to our existing customers. And in Succession Wealth, over GBP 3 billion of advice assets are now on Aviva's platform and even more value coming through referrals. So we are well set to deliver continued strong profitable growth on track for our GBP 280 million profit ambition in 2027. And we will tell you a lot more about our organic opportunity in Wealth at our in-focus session in October.

Now let's conclude the first horizon by looking at the progression of our portfolio. Four years ago, our earnings mix was evenly split. Today, we are 70% capital-light and returns have doubled over the same period. By capturing the benefits of Direct Line and continuing to grow organically, we are on track to reach 75% by the end of 2028. That means faster growth, less capital deployed and better returns. Now let me move to the second horizon, our longer-term growth beyond 2028.

There is still so much more potential to unlock at Aviva. First, our customer advantage is unique, and we can serve more of our customers' lifetime financial needs than any other insurer. Second, we are transforming with AI. And with our scale and data, we have a material opportunity. And third, our capital-light focus is unchanged. We have attractive long-term growth platforms with significant headroom to go after. And with our scale and customer reach, range of growth options and disciplined capital allocation, the value of these three opportunities is amplified by our diversified model.

Now let me take you through each opportunity in more detail, starting with our customer advantage. We have more than 25 million customers with a leading franchise in U.K. financial services and products to meet needs across a lifetime. That enables us to deepen relationships and create more value over the longer term. We also have strong presence across corporates and SMEs. In fact, 1 in 3 large U.K. corporates already hold a policy with Aviva. So we have the customers, the products, the brand and the experience. And together, that creates a customer opportunity that no one else can match. And we are already unlocking that opportunity. Back in '22, we had 4.7 million multiproduct customers. Today, we have over 7 million. Nearly half of all the new policies sold today are to existing customers. That is at 6 percentage points and well above the natural share that we would expect from scale alone. This is not cross-selling for the sake of it. It is about offering the right products to the right customers at the right time, and the benefits are clear. Multiproduct customers have lower acquisition costs and higher retention and engagement. So they are a powerful driver of future growth.

Now let me touch on how we are serving even more customer needs. Customer expectations are rising. So we are accelerating to stay ahead. We are meeting customers wherever they want, across any channel. We already have a clear advantage as the leading PCW insurer. And we believe that AI-led distribution will be an important channel in the future. And that is why we are an early mover here. We are enhancing our ability to target and predict our customer needs. With our single view of customer data and our AI capabilities, we can do this even more effectively than ever. And we are using MyAviva as the front door to everything that we offer, leveraging AI to provide a seamless experience and more meaningful engagement with our customers. Getting this right means we can genuinely be a lifetime partner for our customers.

Turning now to the second opportunity of transforming with artificial intelligence. Our opportunity here is greater than for most insurers, and the reasons are clear. As you just heard, we have millions of customers, a trusted brand and a breadth of distribution. Our scale means that we can invest, innovate and redeploy across the group. We have huge volumes of proprietary data, which is the most critical asset to actually transform with AI. This is an advantage that cannot be replicated and one that will widen over time. We have also been investing in technology. So our IT and digital estates are in a good place, and we have been using AI and machine learning to drive commercial impact for over a decade now.

U.K. Personal Lines is a great example. We have used AI in our pricing models to deliver over GBP 200 million of run rate benefits here. That is on top of GBP 100 million of claims cost savings previously mentioned. And we can rapidly build on our expertise as we move into the next phase of AI now with generative and agentic. So these are all important moats and competitive advantages when it comes to transforming with AI. And we have clear plans to capture the opportunity across the full value chain. We are building on years of investment. Now it is about embedding AI within our journeys, decision-making and day-to-day activities. And this is the next step towards our vision for Aviva.

As Charlotte said, we are taking a disciplined approach with 4 opportunities that cut across the whole group. And as you can see, the transformation is already well underway, aiming to drive material revenue and efficiency benefits and better customer outcomes. Every year, we have over 15 million customer inquiries, and most of them are handled by our people. So later this year, we are launching our AI Virtual Assistant to help customers with many of their queries. In Protection, we have halved the number of -- the amount of time it takes to review each case in medical underwriting with near perfect accuracy. This is improving response time for customers, but helping also our teams to handle more cases. In Claims, we are building a voice-enabled AI claims agent that will automatically route more than half of our motor calls in Personal Lines, and it will always be on serving customers 24/7. And all colleagues have AI productivity tools.

We are now rolling out Claude Cowork to our most senior leaders because we know that we need to lead from the top. And in Wealth, we are using Agentic AI to automatically -- sorry, to automate quality assurance. This will save 50% of time for our back-office teams. Most importantly, it's a capability that we can reuse across IWR and beyond. And it's not just individual customers. We are using AI in Commercial Lines to reduce the time it takes to generate quotes from days to hours, which is driving higher conversion. So whilst it's still early days, our momentum is clear. The benefits are a strong indicator of the value that we will create for our customers, our colleagues and our shareholders.

Now before I talk through our long-term growth platforms, which is the third opportunity, let me explain why we are so confident in the underlying growth of the U.K. market. I haven't been in business here for over 325 years, we do know the U.K. very well. Put simply, our markets are underpinned by clear structural growth drivers that give us real confidence in the longer term. Let me give you an example. Almost 1 million people will retire every year over the next decade, yet many are not financially prepared. That creates a huge need for retirement guidance, advice and income. And we are seeing supportive regulatory developments here, too. Potential reforms to pensions and auto enrollment would be a further set of tailwinds for workplace. These are just a couple of examples in Wealth and Retirement. It's the same story on the protection gap, health care needs and under insurance. These customer needs are significant, and they are only set to grow. And when you look at the broader market, the scale of what lies ahead is compelling. We have material growth platforms in our portfolio, take Wealth.

Today, the market profit pool is around GBP 3 billion, shown by the white line on the chart. That is already significant. But in 10 years' time, it will more than triple to GBP 10 billion, shown by the blue bar. That is exactly the kind of opportunity that we are going after. Across our 5 growth platforms, the profit pool will grow to more than GBP 100 billion over the next decade. This is a huge opportunity to drive profitable growth for years to come, and we are well positioned to capitalize.

So let me bring this to life with a few examples across U.K. Wealth, U.K. General Insurance, GCS and Canada. Beyond 2028, Wealth remains a highly attractive, fast-growing market. There are nearly GBP 3 trillion worth of assets today, growing at double digits. We are already the #1 player with GBP 260 billion in assets, almost 6 million customers and leading positions in Workplace and Adviser platform. And our competitive advantages of scale, corporate relationships, lifetime offerings and in-house investment solutions sets us apart. Not to mention our mass affluent opportunity with over GBP 1 trillion worth of investable assets held by Aviva customers. And there is plenty of growth headroom with opportunities such as Master Trust, Targeted Support and Direct Wealth. So our organic growth opportunity is substantial, and that is exactly what we are going after.

Turning to U.K. General Insurance, where we are the clear market leader. With the addition of Direct Line, we now have standout positions in Personal Lines, and we are a top Commercial Lines player. With our scale, diversified product and distribution mix and unique data advantage, we are well positioned to outperform through the cycle. Yet there are still clear opportunities across the portfolio, and we have the leadership and talent to capitalize on these. Take the new specialty businesses, Pet, Rescue and SME Direct. Collectively, they are equivalent to the size of the home market, yet our share is only mid-single digits. Now with Aviva capabilities and the capacity to invest, we can take all 3 to the next level. At the same time, we are staying ahead of emerging trends with a strong innovation track record. We are a first mover on AI distribution. And as autonomous vehicles roll out over the longer term, our in-house repair network and leading commercial proposition will be key differentiators. So our strategy here is simple: extend the leadership in our core positions while doubling down on the new growth avenues.

Turning to Global Corporate & Specialty. This market covers over GBP 500 billion of premiums globally, and we are a relatively small player today, which means our headroom is significant. What excites me most is not simply the market opportunity, it's the model that we have built. We combine strong businesses in the U.K. and Canada with our growing Lloyd's platform. Together, they help us serve more clients, deepen the broker relationships and leverages Aviva's brand and shared capabilities. And this model is already in action. We are expanding in Lloyd's under our new Aviva Syndicates brand and using our dual platform to create capabilities to share those One Aviva growth opportunities. More recently, we strengthened our access to the U.S. Commercial Lines market with Onshore Presence. And we are doing this in a controlled manner, focused only on areas where we have strong underwriting expertise. For us, GCS is not just about participating in a growing market. It's about actively scaling our differentiated platform.

And finally, on our opportunity in Canada. The fundamentals of the economy are attractive, and we are 1 of just 2 players with a truly national presence, which gives us significant potential. In Personal Lines, we already have partnerships with 2 top Canadian brands. And our most recent partnership with President's Choice gives us direct access to over 20 million customers. In Commercial Lines, we are still underweight in small business. So we are now deploying first-class digital trading capabilities from our U.K. business. We have also benefited from shared learnings in claims, saving almost $600 per repair across 50 auto centers. And we continue to expand our regional presence, particularly in attractive areas like Quebec. Canada is an essential part of the group, an attractive market, a fantastic business, and it has an exciting future. So I hope that has given you a sense of just how much lies ahead.

Let me conclude with Aviva's compelling investment case. We are unlocking the full potential of the Direct Line acquisition. We have unrivaled customer reach with our leading franchise. Our AI opportunity is significant given our scale and game-changing amounts of data. We have capital-light growth platforms in attractive markets with strong momentum and a clear right to win. And our diverse range of businesses delivers high-quality and resilient earnings. And it's for all these reasons that we have absolute confidence in our current targets and full conviction in sustaining strong earnings growth beyond them. Thank you for listening, and let's move to your questions.

[Operator Instructions] So we'll start with Andrew Baker.

It's Andrew Baker of Goldman Sachs. First one, just on U.K. Personal Lines. Are you able to give an update on the pricing versus claims inflation trends you're seeing in Motor and Home? And can I just confirm the comment on, I think it's Slide 10 on policy count growth. Is that for Direct Line only? Or is that sort of Aviva Personal Lines of total?

And then secondly, on the forward-looking PYD guidance, did you -- are you able to give a sense whether the '26 combined ratio targets included a PYD assumption? And it felt like this is a bit of change in messaging versus the past. I guess, what led to this change in messaging and why now?

Okay. Thanks, Andrew. So first of all, the usual update, I guess, on Personal Lines rating. So inflation is sort of mid-single digits, which I think is sort of unchanged since where we were at the end of the first quarter. But as we did last year, we are pricing -- we have been pricing ahead. So if we take you back to the end of 2025 when you had the Pearson Ham data was showing that the market was down on new business rates by 11%, and we were up 1%. If we take it to the half year, the market is saying about 3.6% on rate up on Motor, and we are up 6%. So I think what you're seeing here is our strong rating discipline, but also we are very, very confident about the technical rating strength within the book on the basis of the [indiscernible] repair network, the rates are starting to harden, but also the benefit of all the different distribution and the brands that we have.

I don't know whether you want the home numbers as well. I mean on Home, to the end of last year, Pearson Ham data was showing minus 12% for the market. Aviva was flat. At the half year, the market is flat and Aviva is up 4%. Again, same strength. One thing I would add here, and sort of Owen talks about this way more articulately than I do, is what we are really seeing is the benefit now of the huge amount of data that we have. So when you've got twice the amount of data, the insights, the sophistication that you can put into the pricing, the benefit is really there. So we are able to make really good pricing decisions and exposure decisions around the vehicles that we want to write, where we want to write -- so that I think that, that is also -- we are also starting to see -- it's sort of unquantifiable, I guess, in the numbers, but we're definitely starting to see that as an advantage. I think on Slide 10, we were talking about Direct Line, but Charlotte will clarify that. On the forward-looking PYD.

Yes. So I suppose when we set the targets or the guidance for combined ratio for 2026, we very much set it at the overall level, so with all components in it. And at that point, I suppose I think we're clear that within that, we made no fundamental assumptions on PYD. However, what's important to understand is what I explained in my remarks earlier is the interaction between the underlying and the overall caused by both the risk adjustment effect and the fact that our reserving is towards the top end of the best estimate range. So those do offset.

So as we build risk adjustment, which is 1 to 2 points, let's call it, 1.5 points, something like that, that unwinds then through current. So you've got to look at the two together. It's somewhat of a wash, but it is a structural positive to PYD if you're only applying your lens to PYD. And then if you're only applying your lens to underlying, you say, well, why is it -- it's got a bit of that rebuild in it. And it's the same with the balance sheet resilience. We are constantly making sure that the best estimate is because of the uncertainty that I explained earlier around the [ world ] and with Direct Line, it's at the sort of cautious end of that best estimate. And that is being replenished. So what I don't want you to think is that the prior year development that we're seeing this time is a release of reserves. There is an element of that coming through. But at the same time, we're rebuilding the resilience.

Now on top of that, you actually get claims experience can be different to what you reserve at -- and that, I can't predict what that is going to be. So there's an element of PYD that is completely -- it comes when it comes depending on the actual experience. So I suppose I would say I'm keen for you to understand that properly and keen for you to understand an element of it is recycling and therefore, a wash. And if the risk adjustment is 1 to 2 points and you sort of take that as, I don't know, 1.5 points, there's probably another bit as much as a point, but there's another bit that is that build and recycle coming through as well. On top of that, then there can always be PYD that's up or down that you don't predict. And then, of course, there's weather.

Farooq Hanif from JPMorgan. Just wanted to clarify something on the comment you made on large losses in the underlying loss ratio. Are you able to sort of quantify that? Obviously, there's a bit of deterioration in loss ratio in Ireland and Canada and in the U.K. on top of the Direct Line effect. So I just wanted to understand whether we can model that going forward?

Secondly, you don't mention International in your long-term view in the slides. And I think we're all aware there's quite a lot of SCR investors in international. So I'm wondering if you're able to willing to comment on what you view as the future of that. And I know there's something going on potentially in India. So I was wondering whether you can talk about that a little bit? And then kind of very last point, asset optimization, you mentioned it in the bulk annuity line. I mean other companies are mentioning a lot more and making a big thing out of it. What do you think of that? What can you tell us about your view on that as a source of investment margin?

Okay. So look, I think on large losses, as you rightly picked up, I referred to it. So if we unpack that a little bit. In Canada, we saw large losses in SME, mostly property, and we saw some in GCS that were property, as well. I would say that they are specific idiosyncratic. When we see large losses, we always go back and look at the underwriting quality, but we are here for our customers and when large losses come, they come. So they were quite a lot higher year-on-year in Canada, the large loss amount.

In the U.K., there are a couple of things going on. So there are large losses again that were a little higher than long-term averages. They were a little bit higher than long-term averages last year though. So the turnaround is less marked. I think it's maybe just a fraction of points. Again, though, they are idiosyncratic in nature, and they were both Commercial Lines and Personal Lines. So there's quite a publicized fire steel factory, for example. So again, they are -- idiosyncratic in nature and no particular concerns. I also referred to a one-off. So there is an intangible asset that we've written off from the balance sheet following a project that we discontinued, and that's about 0.6 points. So those are kind of like the drivers of what's happening in the underlying that is large loss or specific balance sheet write-off items. Other movement in underlying is trading and managing margin obviously. That was the first question.

The second question on international. Look, we classify outside of the core markets because that is how we see it. We manage them for value, certainly not for growth. You're right that in India, we now own 100%, and that was triggered by -- there was a regulatory change over there that enabled foreign participation at 100%. We took advantage of that. That gives us clearly more strategic optionality, but there's no other update to say on that or on China at this point. And then on asset optimization, we did have -- we see very much our job to get the right assets in place at the beginning. And we see it as being an underlying activity to continue to work on the back book and look at asset opportunities as they come up. So yes, there was a relatively modest, but important piece of asset optimization that came through this time. But we don't classify that as management action. It is what we do, and it's about getting the right mix at the beginning and then managing it on an ongoing basis. So we don't have the same sort of headlines that some present. But that doesn't say we're not all over the asset optimization. It's just a different treatment.

Andrew Crean from Autonomous. Could you do a couple of things? Firstly, fill us in on what's happening in rates in U.K. Commercial and then Canada, Personal and Commercial. And then secondly, you seem very bullish on Wealth, both near term and long term. Can you give us a sense of well on track? Is that a euphemism for likely to be GBP 280 million? And longer term, if you are that -- if you do feel there's that much of an opportunity, can you catch up in direct D2C platforms? Or does that take M&A?

Okay. Thanks, Andrew. So rates in Commercial Lines. So what we're seeing here is that -- let me just try to find the right page here. So it obviously depends by line of business. So what we have seen in the mid-market, which is around sort of 60% of the SME segment was that's up by about 1%. That's benefited by higher retention. So I guess what you're seeing here is the inflationary provisions within the Commercial Lines portfolio basically -- flattening -- offsetting the flat rate. So it's sort of flat rate. There is some decrease in SME, where we have traded better than -- sorry, not traded as well. So I'm all over the place. I'm just trying to find the right page, so I give you the actual right numbers.

But actually, the inflation is mid-single digits. Inflation provisions are covering that for the vast majority of the products. In terms of the rating strength, the rating strengths are strong across virtually all of the product lines. So we're seeing price effect in mid-market is about minus 3%, but the rate strength is over [ 100 ]. We're seeing pricing in motor and digital down by sort of mid-single digits. Again, we are covering that -- covering inflation in the rating on that. And then on the GCS, the I mean there's about 20 different product lines, so hard to give it all. But in essence, every product line apart from Property and Professional Indemnity, the rate strength is over 100%. I've made a right pig's ear of that. But hopefully, you've managed to get the broad sense of that because there's so many different numbers. And I'm not looking at Jason to make sure I haven't misrepresented anything there. But that's pretty much the case.

In terms of Canada, so on Canada, we are -- personal lines is -- we're still carrying good rate in Canada on personal lines. So that is sort of about 10% in the first half and -- yes, 10% in the first half on Motor and not -- can you just help me here, which page is this?

Yes. Okay. Got it. Right. So on Personal Lines, it's that 10% in motor. I'll come back to Home in a second. In SME in Canada, the rate is about 5% down on SME, 3% on GCS and in total, down about 4%. But again, most of those product lines are covered by the inflation-linked provisions. So on Home, the rate outlook is 7% is what we are carrying on rate for 7%, and that includes indexation. Does that make sense? 6% in Auto, sorry, and 7% in Property. If you've got any of that, you'll have done really well because that is so complicated. But if you are -- if you want any clarification, I can clarify. I've now got it in front of me. There's another question?

Yes, IWR. So on -- yes, we are very bullish on wealth. And why is so is because in Workplace, if we think about -- there's GBP 1 billion of regular contributions coming through on Workplace, which is just the sort of standard. The retention levels on the scheme is about 95% -- existing schemes is 95%. And we're continuing to win business on a regular basis, and we've got the mercer stuff coming through. So when we say we're likely to be, I'm looking at the team and saying, we are -- we can see the line to the GBP 280 million. And we've put a lot of investment obviously into this business over the last number of years. And that investment does have peaked. And now we're looking to see how we take that forward from there post 2028. more to follow in the session that we do in October.

On the catch-up on Direct Wealth, -- so look, I think here, the way that we're looking at this is that the information that's come from targeted support, the early days that we've sought the approval of the FCA to do pension in the early stages of targeted support. So people who are in old pension products, putting them into new pension products and then people who are under saving in their pension and how do we target them. The early days, and it is very, very early days because we only started that in sort of in May are really, really encouraging with more people responding to that than they would do through the normal marketing campaign. So we feel very confident in our ability to be able to connect our existing businesses, our workplace customers through to our Direct Wealth proposition. And we talked about the direct wealth sales coming primarily from Aviva customers. That's not just from IWR customers. It's coming from Motor customers. It's coming from Home customers, and it's also obviously coming from other Wealth customers. So we believe that through using targeted support, using MyAviva, using the technology and using AI and the opportunities that we have there, we believe that we can continue to organically grow that business without the need to do M&A.

Abid Hussain from Panmure Liberum. I've got three questions, I think. The first one is on GI margins. If I normalize the margins for the reserve releases and the weather impacts for this year and last year, I think there's almost a 2 percentage points deterioration in the margin. And outside of large losses, I think that might be the mix effect, the impact of Direct Line, which I think was on a lower-margin business. So I just want to sort of check that is the case? Or are you doing something else in terms of optimizing for the bottom line and perhaps relaxing your criteria on the margin side. So just any color on that?

And then second one, just coming back to the BPA IRRs. Thanks for the new disclosure. It's helpful to see the 18% IRR. But just on the lifetime IRR, I suspect it's higher than that and peers are now quantifying management actions of sort of GBP 400 million to GBP 500 million. I think that used to put in around sort of GBP 100 million to GBP 200 million for yourselves. So there is a big delta opening up between yourselves and peers. So just wondering if you have plans to address that over the medium to long term?

And then just finally on AI, it looks like it's now more deeply embedded in the business. I'm just wondering what sort of guardrails do you have in place? I've heard of teams burning through tokens over a weekend relative to the annual budget -- burning the annual budget in a weekend. Just wondering how do you ensure that this is a net positive to the bottom line and what sort of guardrails do you have?

Okay. Let me start with those two, yes. So look, on GI margin, I mean, if I take U.K., which I think is where your focus is, underlying COR changed by about 1.6 points. If I don't repeat all the stuff I've talked about in terms of the assets and the large losses, then there's probably a residual of that 1.6 points there's probably a little under 1 point of movement. I would say that is manageable margin compression, as you would expect as we trade sensibly in softer markets and because we've got good rate adequacy, we can afford to do that.

I think the Direct Line business improvement, I mean, this time last year, we had no Direct Line in the half year. We -- it came on to the books. We were clear that we weren't totally happy with it, and we've been taking action. So some of that is earning through. But compared to 1 year ago when we had no direct line with the business that we're still working on, you can imagine that, that's had a little effect on the margin as well. So all of that is actively managed, underwriting discipline that you've got to trade in the market and where we are in the cycle, you're going to see a little bit of margin compression, but we can afford that. So that's that one.

On the BPA metric and the rationale we've given here, we just wanted to be completely clear on how we do it. It is 18% that we've given for the half year number, it's a lifetime IRR. It has no management actions assumed. So if we do have management actions, that will give us some potential upside. And I suppose given this year, we took, I think, in the walk on the solvency, I talked about that probably being about 3 points still to come from management actions, and we've got about GBP 100 million already in the first half. So management actions are expected to come, but they're not reflected within the methodology. I'd also say that -- and I think I said it in the opening remarks, but just for emphasis, the first half was characterized by small deals, which have higher margin. The strain was lower as well. As we look at what's moved us to the 1.9 points where we are now, there's some bigger deals in there. So you'd expect that IRR to come back down as we head towards the year because that's the nature of the trading we're doing, but still above the low sorry, the low teens. So 18% coming down a bit, but still above the hurdle.

And we just wanted to be really transparent on how we do it and give you an illustration because it came up quite a lot before, and there's a lot of different types of numbers out there in the market. So now armed with our transparency. Maybe you can ask others about it.

And on the AIB and BT and Investors, yes, I mean, yes, obviously, it is and has been for a very, very long time. And I think you were specifically talking about token usage and apart, obviously, from having to restrict Charlotte's usage of Claude, which she's become slightly obsessed with. We are monitoring the costs in exactly the same way as we are monitoring all of the other costs within the business. And we don't -- we definitely see this. You're absolutely right. There is a definite benefit from AI in terms of revenue and also efficiency. But there's also a cost to AI. And everybody talks about the first two and not about the third one. We are very, very actively looking at all of those three levers. And hopefully, with what we've shown you, you've seen that all the projects of everything that we're doing, we're looking at the ROI. We're looking at the returns. And then we're seeing, okay, well, what will be the future cost for us to be able to run these models. And we've already got that in many respects with the machine learning models that the teams are using for pricing.

Sorry, did you actually ask for guidance on the management actions as well?

[indiscernible].

Yes. So this year, we've done about GBP 100 million at the half year. I guided to the 3 points sort of for the second year, that translates to about another yes, another GBP 150 million or so. So it's going to be a bit more than the GBP 200 million guidance. As you go forward, I would still slot into the model GBP 200 million for the moment. Obviously, some years are higher. Last year was particularly high, for instance. And -- but that order of magnitude as we work through balance sheet opportunities.

Nasib Ahmed from UBS. So firstly, on the 11% EPS CAGR, excluding Direct Line and share buybacks, it's about 7%. I just wanted to unpack that on where that's coming from in terms of the businesses. And the background to the question is, I feel like BPA, Health, Retirement is seeing headwinds. So about 50% of your business is seeing headwinds. So where do you get the underlying 7% over the plan period, if you can break that down?

Secondly, coming back to the risk adjustment, I was looking at the disclosure in the pack where over the first half, I think it's only GBP 20 million of release net of reinsurance and you're guiding to 1 to 2 points, which is GBP 70 million to GBP 140 million. So is the first half kind of a one-off low release? And then finally, on the best estimate range, can you give us a percentage range on is it kind of 5% above the midpoint of the range that you're talking about, Charlotte? Any color on that would be helpful.

Okay. So look, the guidance that we've given on the 11% towards the target, as you say, is split 2% from share count reduction, 2% from the Direct Line synergies and another 7% from underlying growth. And we would expect as we move to more capital-light that's supporting some of that. I think -- sorry, I think in terms of this half year, you've got higher share count coming in after we issued for the Direct Line. You've then got a little bit of movement coming from the buyback that we've done. So the -- it's hard to show the same split in this first half. As over the second half, the share count will remain stable and that effect will be smoother. But what -- I mean, I've got a bunch of different analysis that show exactly where the EPS development is coming from in this period. And it is coming from the benefits of turning around Direct Line. It's coming from the benefits of the improved performance in Health and Wealth. So it is across the group.

And so I suppose I'm not going to give you a specific breakdown, but it has got all those components. If you think about the opportunity, I think you mentioned there that there were headwinds in BPA, Health and Retirement. Don't confuse the fact that we're not going to hit the GBP 100 million on Health as a sort of headwind. The actual profit trading performance is really strong in Health, and we see real opportunity for Health to continue to grow. So I think Health is still a growth engine within the business. On Retirement, it's really strong growth in individual annuities, really strong growth in equity release, less capital strain on the bulk business, but still the opportunity to write business. And that is not going to be an impact for the 3-year target, the amount of bulk volume that we write.

And as Charlotte said, there's really strong momentum in Wealth. And even post the 2028 period, we feel really confident that with GCS, with Health, with Canada, with UK GI with the turnaround of Direct Line, and layer on top of that the benefit of the customer advantage and the AI opportunity, we are very confident. That was the reason that we wanted to talk today about the post-2028 because we could see that investors were asking us, okay, we get after 2028. But post-2028, what is there? And we think there's a lot, right? So we are very, very confident about that slide.

No, that's correct. But -- and I would say a combination of margin expansion and top line growth, and that's across the different areas. So margin expansion is definitely direct line. It's definitely all of the work we're doing in operational leverage. And then top line examples would be, well, Wealth, GCS, those areas. So I think it's a good quality mix. But we don't button it all because it's a diversified group, and we're looking for the opportunities and we move accordingly.

I think your risk adjustment number is just wrong. So why don't we take that offline? It's about 1.5 points for this first half. So you must be reading the disclosures. So if they're not clear, then we'll help you through that. So maybe talk about that afterwards.

And then I think best estimate, again, it's best estimate. So I'm certainly not going to give you another percentage other than a sort of best estimate. However, what I said earlier was if you think about how it's going to build and unwind, if it's between 1 to 2 points for the risk adjustment, let's call that 1.5 points. let's say it's just under 1 point for the build of reserve and unwind of that. But I'm not going to give you another confidence level statistics like the one we have for risk adjustment for the best estimate.

[indiscernible], Bank of America. Two questions. Just on Slide 16, you talk about improvement in the distribution ratio. Obviously, we can sort of factor in the improvement from the direct line synergies, et cetera. But can you talk a little bit about how you're thinking about the benefits from AI, et cetera, and how we should think about building that into the distribution ratio?

The second question is on Amanda's point about multi-holding -- multiproduct holding customers. I think you said there were 7 million at the moment. Number one, I guess, where do you expect that to go over a couple of years? And what is the average number of products each of those customers hold currently? And again, what is realistic going forward there? And again, how does that then factor into the sort of distribution ratio given your comments about lower acquisition costs, et cetera?

I pick up the first, Charlotte pick up the second one.

Yes. I mean I'm not going to give you a specific number. I mean I think that the reality of it is all the work that we're doing on -- that are helping whether it's the claims activity or the virtual assistant type of that were all helping with the acquisition cost and enabling the cost base we have today to go further.

And Owen in particular, is completely relentlessly focused on that ratio in the Personal Lines side. And if you take the Commercial Line side, some of that work we're doing on AI that is really connecting us brilliantly with the broker, really spotting which brokers give us the business and really working through that. All of that combined is going to each way at that cost of acquisition. And so internally, we're measuring that, but I'm not going to give you a specific guidance, but those will be the drivers of what improves that.

Okay. And then on the multiproduct holding. So if we think about the U.K., 22 million customers. So we've got 4.7 -- we had 4.7 million multiproduct customers in 2022. That's increased to 7.2 million today, which does include the impact of the Direct Line acquisition. And so it would have moved from 4.7 million to 5.6 million, excluding Direct Line, to just give you that number. 46% of new sales are to existing customers. So I think that sort of stresses the importance. And just to give you the flavor here.

So for a multiproduct holding customer, the cost per acquisition is 30% lower. So that -- I guess that shows just how efficient the marketing spend is there because obviously, we know a lot about those customers, and therefore, it's very targeted in the way that we speak to them. We also have better retention rate. So the retention rate is about 1.7 points higher than if you're a non-multiproduct holding customer. And then they engage more. So they're 2.8x more engaged on the MyAviva App than a single product customer. I mean I literally could go on all day because there are lots of these brilliant customer stuff. But if I go back to the example of the 70% of Direct Wealth sales coming from existing customers, just imagine -- and we haven't really turned that on massively yet. When we turn up the dial on that, it's all there. And there are things today like in the PCW Motor rating, even if that customer doesn't say that they are a multi -- that they hold a pension with us, Owen is able -- he knows that because of our single view of customer, and he's able to give a pricing benefit to that customer because we know that, that customer will be more loyal.

In terms of the outlook, look, I think setting an outlook is not the right thing to do because what you're not seeing in these numbers is actually the number of customers that are moving from 2 to 3 and 3 to 4, which is actually quite something. So the number of customers with 3-plus products has moved from 1.6 million in the half 1 of '25 to GBP 2.4 million in the GBP 0.5 million of '26. Some of that is Direct Line, obviously. And the customers with 3-plus more projects over that same period has grown by 4% from GBP 1.7 million to GBP 1.6 million to GBP 1.7 million. So we're definitely seeing that it's not just customers moving from 1 to 2. That's nice. It's when they start moving from 2 to 3 and 3 to 4, and this is the power of the model. And that is something which I would say we're only in the foothills of, like it's so exciting.

And AI opens up that opportunity even more. And I think your point was where you're going to see that coming through in the expense ratio? Well, I think you'll see it coming through in retention. You'll definitely see it coming through in the cost to serve because that acquisition cost will reduce. But I think there's a benefit here of what do we trade, what do we take into the bottom line and what do we reinvest to be able to underwrite more business. And I think that's -- those are the opportunities. We've got optionality, right? I mean that's the benefit of the diverse model. So very excited about that. I think I answered all the points.

James Shuck from Citi. I had three questions, please. Just on the PYD point, I understand the recycling between risk adjustment in the sort of attritional and then the PYD. But sort of at a steady state level, there's kind of nothing really to see there on that kind of view. On the 11% target you have across the whole of the 3 years, therefore, is the kind of expectation if now we're going to be looking at 2 to 3 points of total PYD. Is that incremental? Or was that already in that 11% target across the 3 years?

Secondly, the walk on the U.K. GI was really helpful, the underlying combined ratio. Could you just repeat the same thing for Canada as well, please? And then finally, just anything you can give on very, very most recent motor pricing in the U.K., very helpful.

Okay. So the EPS development of 11% is well, to the extent that the risk adjustment recycles, it's a wash. To the extent that the reserve -- the reserve strength is retained. It's also a wash. So those two are neutral, right? So they're not driving growth in EPS. I'm not assuming that in that cycle, I'm going to do something different and start releasing more reserves than I'm building. So there isn't an assumption built into the EPS development that is from PYD, because those two things are a wash.

There will be natural PYD and there will be natural weather, and we have to manage that in the round in order to -- because those are volatile items that I don't know how they're going to emerge. Now clearly, we have weather loadings, and we have large loss expectations all based on long-term averages. But to the extent that things move outside of the range, then that is something that because we've got the diversified business that we would expect to manage. But there isn't an assumption that there is a PYD kicker to drive that 11% development because I'm intending to keep the balance sheet resilience stable and beyond that, PYD could emerge in either direction. What we're trying to get across is just that you can structurally allow for the PYD because it is there and it's offsetting in current. And when you kind of go through one lens or the other, you need to keep in mind the natural offset that appears in the other lens. What was the second question?

It was about the walk on GI call for Canada. Okay. I do the motor -- so I think I said -- I answered Andrew's question just around -- we are -- I think it was -- yes, what Andrew, 6% -- we are rating 6% up on motor today and 3%. I think you were asking what's the most recent data.

So look, I think we don't have like the actual plan for the market. We know that we are continuing to be disciplined. But I think what you've seen is that the ONS and the ABI data is showing that the market is steadily walking up. And I think you've heard others say that in their results. And we are clearly using our data advantage, our approved repair and network advantage and the fact that we have got very strong technical strength to be able to trade our way through that. So hopefully, that answers that. But I don't have any more actual data on that, James.

Yes. So in Canada, it's 2.6 points underlying worse this time than last time. I'm sure that's the same numbers you've got. The large losses, though, are a good portion of that. So the reserving movement is relatively neutral, but the large losses are bigger quite considerably than they were this time last year. So -- and then below that, there will be a little bit of that margin movement, but it's relatively minor. We've exhausted you.

I think it was my answer on I'm definitely [indiscernible]. Literally [indiscernible].

Hopefully, you did get everything you needed there. So look, thank you very, very much for coming in on the Friday morning. It's air condition. That's got to be a good thing. We really, really appreciate that. And obviously, follow up with any other questions to the -- with the IR team or Charlotte and I. Thank you very much.

Thank you.

I would now like to hand the conference over to Aviva's Group CEO, Amanda Blanc.

Thank you very much. Good morning, everyone, and welcome to Aviva's first quarter update. As usual, I'll give a short overview and then hand over to Charlotte to give you the details before we move to questions. Aviva has delivered another quarter of strong trading and profitable growth across the group, once again demonstrating the benefits of our diversified capital-light model against the backdrop of global market volatility. Let me just share a few highlights. In General Insurance, premiums are up 19% with an improved combined operating ratio. This shows our ability to effectively manage through the cycle and get ahead of emerging inflationary impact. In U.K. General Insurance, strong premium growth has been driven by the addition of Direct Line and underlying performance in U.K. Personal Lines. In Canada, our new management team is building momentum with growth across Personal Lines and Commercial Lines. And in Wealth, where we are the #1 player, we secured GBP 3.3 billion of net flows, up 49% year-on-year, and flows have continued to be strong since the end of Q1. On strategic delivery, we are making excellent progress on the Direct Line integration and remain firmly on track to meet our synergy targets.

And the improvements we are making to underwriting and pricing are paying off with better profitability and Direct Line branded PCW policies nearly doubling since the full year. Looking ahead, our continued strong trading momentum, real progress on the Direct Line integration and market-leading businesses give us confidence in our 2026 outlook, including the guidance that we've given around combined operating ratio. And we are equally confident in delivering our medium-term group targets and continuing to deliver value for our customers and our shareholders. I'll now hand over to Charlotte to take you through the numbers.

Thanks, Amanda, and good morning, everyone. I'll first cover the business highlights, starting with General Insurance. We achieved strong growth with GBP 3.4 billion of premiums across the U.K., Ireland and Canada. I'm pleased with the core development across all markets, a result of our discipline in pricing, strong rate adequacy and cost focus. Weather was more consistent with first quarter long-term averages compared with the prior year, which has been adverse. Overall, this led to an undiscounted COR of 94.1%, which was a 2.5 points better than Q1 '25.

In U.K. General Insurance, premiums grew 28% to GBP 2.4 billion. We have remained disciplined in pricing across the portfolio and rate adequacy remains strong. Personal Lines premiums were up 62% to GBP 1.5 billion. This was naturally higher with the addition of Direct Line alongside growth across the rest of the portfolio, including intermediated business and our new home partnership with Nationwide. We added 2.5 points of rate across the motor portfolio in March to help manage inflationary impact.

Commercial Lines premiums of GBP 834 million reflects strong retention and our continued focus on deliberate underwriting discipline to manage profitability through the cycle amid softer market conditions. So to unpack this a little bit more for you, mid-market, which makes up about 60% of the SME channel, was up 1%, benefiting from high retentions of close to 90%. This offset lower top line in digital and intentional profitability actions taken in scale. Probitas was up a little, driven by the addition of new lines of business. And although GCS volumes were lower, primarily where U.K. market conditions have softened the most and competition is the highest.

This is because we have chosen price adequacy over volume. Across all segments, quote flow and broker engagement is strong. We continue to grow selectively protecting earnings quality. This is more important to us than defending short-term volume in parts of the portfolio where prices would not clear our return thresholds.

Finally, April renewals have gone well, and we expect the top line trends seen in Q1 to moderate over the rest of the year. U.K. undiscounted COR was 94.8%, a 0.5 point improvement on Q1 '25.

And we expect further improvement in the COR throughout the year, particularly as the pricing actions we have taken on the direct line book earn through. In Ireland, premiums of GBP 157 million, up 8% in constant currency with personal lines up strongly. Ireland saw its core improved by 18.5 points, reflecting more normal weather compared to 2025, which have been significantly affected by storm Éowyn.

So looking at the U.K. and Ireland together, the Q1 COR of 95.1% is 1.8 points better than last year. And as you'll remember, Q1 is typically higher than other quarters due to a higher weather loading. And the weather experience was in line with this loading and therefore, is consistent with the expectations we had when we set the sub 94% guidance for the full year. And to confirm, we remain firmly on track to meet this.

In Canada, premiums of GBP 907 million grew 3% at constant currency. Personal lines premiums grew 4%, supported by continued rate actions across both auto and personal property. In Commercial Lines, premium grew 1% as lower average premiums in SME property were offset by some large wins in GCS.

Canada's undiscounted COR was 91.8%, an improvement of 4.4 points. This strong performance reflects the actions we have been taking to improve profitability across all lines and more favorable cat experience than last year. This is a great start to the year in Canada, and we remain on track to meet our guidance to achieve a core approaching 94% for the full year, remembering that Q3 is a peak quarter for cat activity in Canada.

Moving to IWR. Wealth flows were up 49% to GBP 3.3 billion, representing 6% of opening AUM, another excellent performance. Workplace flows of GBP 2 billion were up 71% benefiting from strong retention and new business wins in 2026 compared with the loss of a large workplace scheme in Q1 last year.

Platform continues to perform really well, up 24% to GBP 1.6 billion. Tax year-end was another success with strong inflows in both Adviser platform and Direct Wealth. Our Wealth business continues to demonstrate its resilience as it has done through a number of periods of volatility over recent years.

And we are confident in our ambition to deliver GBP 280 million operating profit by 2027 and in the continued growth trajectory beyond that. In the insurance business, protection sales were broadly consistent year as growth in Group Protection was offset by a lower result in Individual Protection. You may recall that Q1 2025 benefited from strong sales in advance of stamp duty changes last April. For health, in-force premiums increased by 9%, supported by large corporates, which more than offset some reduced demand across SME and consumer channels. We remain focused on achieving our ambition of GBP 100 million of operating profit for health this year.

Moving to Retirement. Sales were GBP 1.1 billion in the quarter. Within this, individual annuities increased by 10% and equity release sales were up 8%. In BPA, we wrote volumes of GBP 619 million across 20 schemes within the quarter. As of today, this has extended to GBP 1.1 billion.

We have maintained our discipline in a highly competitive market and continue to exceed our hurdles and achieve at least low teens IRR. Finally, in Aviva Investors, AUM was stable as we saw improved flows across both external and internal channels, supported by wealth and the additional transfer of direct line assets.

I'll now move on to the balance sheet metrics. Solvency was 171% at the end of Q1, in line with our expectations. This was after using 13 points of capital for the final 2025 dividend of GBP 800 million and the share buyback of GBP 350 million. Cash generation in the quarter added 6 points. This included around 2.5 points from beneficial market movements, mainly from higher interest rates in the U.K. and Canada. was partially offset by the expected 2-point reduction following the end of Solvency II grandfathering rules for GBP 200 million of Tier 2 debt.

Our previously published Solvency II sensitivities demonstrate we have relatively low exposure to market volatility. Therefore, recent market turbulence hasn't had a material impact on our solvency position. We remain absolutely on track to deliver at least GBP 350 million of further capital synergies from the Direct Line transaction by the end of this year.

And as you'll recall, this is equivalent to 7 points of solvency and is in addition to the 3 points we delivered at the end of 2025. As always, we maintain a high-quality asset portfolio. Our credit portfolio continued to perform well in Q1 and to date. We experienced no downgrades below investment grade.

Almost all the assets outside of public debt on our balance sheet are sourced in-house by Aviva investors using a robust risk management framework. They are predominantly real estate and high-quality U.K. productive assets, including infrastructure, and we have no exposure to the types of investments you have seen in the headlines. And we've provided more color on our portfolio in this morning's announcement. The assets are high quality, almost all investment grade and provide predictable matching adjustment eligible cash flows under the Solvency II framework.

So to summarize, we've had another good quarter. Aviva continues to have a firm grip on performance management, and we are on track to deliver our ambitious plans. The Direct Line integration is making excellent progress with improving profitability and strong PCW volume momentum.

We are absolutely on track to meet all our integration milestones and to deliver the expense and capital synergies previously announced. We are well positioned for the period ahead. And despite the ongoing geopolitical uncertainty, we have observed limited changes in customer behavior. The insurance sector generally and Aviva more specifically, have consistently proven to be resilient, and we have successfully navigated periods of uncertainty in the past. While we are not complacent, we remain confident in the outlook for our group. And with that, I'll hand over to the operator so we can start question and answers.

[Operator Instructions] Our first caller is Farooq Hanif from JPMorgan. Please go ahead.

Could you possibly give us your traditional summary of pricing in U.K. Personal and Commercial and also between Home and Motor, just for clarity. And can you also confirm that what you're saying is that ex Direct Line, there was underlying growth in Personal Lines.

Second question is, can you talk a little bit more about your long-term ambitions in the commercial lines market? Obviously, Probitas is growing a bit. I believe you've entered or thinking about entering the U.S. market in a very small way.

What are the attractive pockets for you? And where do you think pricing is still attractive or there are opportunities for you? And then final question very quickly is you talk about growth in the wealth profit beyond the GBP 280 million. Is that a stable margin? Or do you think operating leverage is going to play a very important part in the profit expansion there?

Okay. Thanks for those questions, Farooq. Okay. It's good to know that it's our usual summary of pricing. I will become that boring that we always do the same thing. But yes, so should we start with Motor and Home? I think that's probably the best place to start.

So I would say that in motor, we would say that, that market is hardening. And what we have done in the first quarter is that in, across the motor and the Aviva and Direct line, we have put in 3 points of rate in Q1 versus the Pearson HAM data, which is showing motor up 1.

So I think that shows the discipline once again that we are displaying there. In Home, the Pearson HAM data, I think, is showing rates at minus 1 For Aviva, our rates are at 2. so in Commercial Lines, so I think there -- I think you asked a number of questions about ambitions.

So I'll come to that in a second. So maybe I could just give you an idea of rating strength in commercial lines rate adequacy. It might be the sort of easiest way for us to play it. So on what we call our SME business, which is the sort of digital scheme and mid-market, rate adequacy is well over 100%, and it's more than that in our global corporate specialty business.

Now what you obviously are seeing is that -- and by the way, there's strong retention in both of those areas. But what we are doing is when we are looking at our rating adequacy for a new piece of business, we are being incredibly disciplined about that rate adequacy for new business.

And where we have quoted and won new business, the rate adequacy is about 10 points higher than if we had -- where business that we lost to the market. So I think that gives you an explanation of the difference between our approach to pricing and what we are seeing in the market.

So you'll have seen the March data about rates down. I mean that is sort of what we are observing. And the more difficult lines of business, financial lines, commercial property in that global corporate space. So look, I've been trapped around too long, 35 years in this industry and starting as an underwriter. -- my guidance to the team rightly or wrongly is you do not grow into a soft market aggressively. And so we have been -- we have and we will be disciplined about our approach to that, albeit I think that in that first quarter, we had a few sort of 1 or 2 big lapses where we just weren't prepared to match the market.

And we believe that we will moderate on commercial lines in terms of that premium towards -- in the 3 quarters. The 2 big quarters for commercial lines for Q2 and Q4. Now if we think about what -- so what are the pockets in commercial lines. So first of all, let's be very clear, Aviva is an incredibly strong player in the commercial SME digital mid-market in the U.K. We would be #1 with the vast majority of brokers here.

And we've got very strong propositions. So our Fast Trade proposition wins all the awards for being the best proposition. We've got a very strong performance in mid-market, as Charlotte articulated there at 1% with a strong close to 90% retention rate.

And we've got very strong propositions, whether that's in terms of our Broker Academy, the deal proposition, our partnerships proposition. So I think -- and our schemes proposition. But what we will not do, however strong the relationship with the broker is, is if there are profitable segments of business, and we've seen that in this quarter. We have some schemes that were underperforming when we will obviously not keep hold of those schemes. So I would say, in Canada and in U.K. and in Ireland, very, very strong propositions in that SME, mid-market digital proposition. And that learning is being shared between the Canadian, Irish and U.K. businesses.

Ireland have launched new fast propositions in the last number of years very, very successfully and launched lots of new product lines. Now GCS is much more, there's less loyalty in the GCS space. I always look at Charlotte and say people like you making the decision on GCS business. It's not relationship traded.

It's sort of hard-nosed traded. And so it's much more driven by price. And if you think about commercial motor, which is where our retention has been lower in GCS this quarter and property, those are areas where they are marketed almost every year.

And so you'll have the opportunity to write that business at more profitable rates. we will not write that business unprofitably. So in terms of that GCS market, we will maintain discipline through this market. And we do consider that the sort of that market will be soft for the balance of this year. But there are opportunities for us to grow in other segments. Now you touched on U.S. GCS. So obviously, this is not a new market for Aviva. We've already got a profitable book of U.S. business, which is underwritten from London.

And what our planned onshore business builds on this and enables us to get closer to the customers there and significantly expanding our addressable market whilst leveraging our existing capability. The important point here is around the broker relationship because if we think about the brokers now that are in U.K. and U.S., our accounts with those brokers will be huge in the U.K. So if you think about the likes of Gallagher, Aon, Marsh, Willis, Howden, they've all got big U.K. relationships. And so we're harnessing the opportunity from those U.K. relationships, and we've got a small team in the U.S.

Our initial focus will be on property, casualty and particularly specialty lines business. And that's where we'll start, and we'll start small, and we'll be very careful clearly about how we do that. But we're looking at that investment over the long run. We think it's an exciting opportunity. We'll do it in a measured and sensible way. Hopefully, that answered all of those questions. Charlotte, did you want to pick up the wealth margin?

Yes. I mean, I suppose the point around the unstoppable momentum in our wealth business coming from Workplace, combined with all the investment we've been doing in the direct proposition, guidance support coming along, there's a lot of tailwinds. I think we've said all the way back to the focus session on wealth that we continue to expect revenue margin and that we talked about at the year-end, and we expect that to continue in line with those expectations.

So it does make it really important that we use our scale and efficiency within the cost base to deliver the improving operating margin all the time. And I think we talked at the year-end that despite the headwinds on revenue margin, we were just over 1 point improved on operating margin. And we will continue the initiatives to keep driving that forward.

And just one point on the Mercer scheme, which obviously we talked about at the full year. So that is not in the Q1 because the first of those tranches of the schemes have started to transfer in April.

And the majority of those flows and the larger schemes will be back-ended over the next months. So as well as this GBP 1 billion of regular contributions, the 112 new schemes that we won, we've also got this Mercer business, which will be flowing in. So very, very excited about the opportunities as well.

Our next caller is Andrew Baker from Goldman Sachs.

I guess both on the BPA side, if that's okay. Firstly, how should we think about the VNB margin development for the rest of the year? And do you expect the PRA's funded proposed changes to have any material impact on pricing? And then secondly, I can see you're still delivering low teen IRRs. But I guess if competition increases here further, will you simply just pull back on volumes? Or could you explore other options like sidecar structures or anything like that?

Okay.

Yes. So look, I think on the VNB margin, I mean, it is important to remember a couple of things. The scale of the BPA market that transactions that came in it's sort of more in the 4 billion space, whereas back in -- from a market perspective, whereas in Q4 '25, it was sort of more in the GBP 12 billion to GBP 14 billion.

So it was a very different size and scale of market, combined with increased numbers of players looking to compete. So you got those 2 of those dynamics. If we look at the trades that we did, actually, what we saw towards the end of the back end of Q4 was they were smaller schemes and through the clarity and they gave us a slightly higher margin. What we've seen this time is a couple of bigger ones and some smaller ones, so it's been a bit more of a mixture. So you are seeing that competitive driver. And as we said, for us, it's less about the margin. It's more about the capital spin and therefore, the value creation over a period of time, which is why we focus on the IRR. And with a WACC of sort of 9% or 10%, 9-ish percent, having low teens IRR is a good margin over that. So that's our focus. I think as we outlook this year, already having now got to 1.1 by now with a pipeline that is reasonable, not this year, but over the course of next year, we would expect some of the remaining internal schemes to come to market as well.

So there is a decent pipeline. We will always be disciplined. We compete hard, and there are some transactions that we don't win because we're not willing to go to the prices that they transact at. And that is the discipline that you know and should expect from us. With funded, we don't use it very much. We use it sparingly and where we use it is because it makes sense to do so, not to take advantage of perhaps historic differences in the capital framework. So it's not altering our plans. Again, we will continue to use it where it makes sense to do so, but it's pretty sparing.

So it has very little impact on our strategy or execution, which is probably different from some of the others in the market. And then I suppose if we can't hit our hurdles, just to repeat, the discipline will mean that we've got other options. That's the beauty of the diversified model, and we will look to deploy it in other areas. But I think we have a great team, and we are continuing to compete and where we're losing out here and there is because people are doing so at prices that we don't see are economical.

Our next caller is Thomas Bateman from Mediobanca.

I just want to come back to the BPA margins. I was a little surprised you've written business at these margins at all because I would have thought that the strategic asset allocation was quite similar to last year. Is the market really that competitive? Or is it just is there, I know you alluded to the mix shift -- is that playing an even bigger effect than I might think? The second question is just on your comments around health and the slightly slower demand. Could you just bridge us to how we get to the GBP 100 million 2026 target? I say this because you seem very confident in the target, but there's still a big gap, I guess, there. And the final question is just on the integration with Direct Line. Could you let us know how you're going on in terms of cost cutting and the benefit from expense synergies that are likely to impact the GI combined ratio this year? I say this considering that I assume there's relatively little impact in the combined ratio so far?

You want to do 1, 2 and a bit of 3 and we share 3?

Look, I mean, I don't know there's a huge amount more to say on the BPA margin. We are disciplined. We're writing BPA business. It's relatively low strain from a capital perspective, and therefore, it's driving those IRRs that totally makes sense. The IRRs themselves are a long-term metric as opposed to sale metric. So they kind of drive the value and kind of like include sensible assumptions on Solvency II and capture more of the lifetime value. And that's our focus. And as I say, we are able to transact at levels that meet those hurdles. It's a small component, obviously, but it has been a smaller market, too. So I mean, I'm in danger of just repeating what I said to Andrew, but that is it.

And so on health, so what we're seeing in health is there's different dynamics going on depending on what part of the business you're talking about. So we're seeing good demand from the large corporates.

And you've seen our in-force premiums increased by 9%, and that is primarily driven by those large corporates. Where we're seeing less demand is in that SME space where there's a real affordability point following the national insurance contribution changes and SMEs have got choices to make. And I guess it's pretty important that they pay the national insurance contribution. And on consumer demand, you're seeing less written about waiting lists, et cetera.

But I think the way that we look at this and why we feel very confident about it is that what we're seeing much more is that the corporate customers are looking at health and protection together and looking at how can you get people back to work more quickly. And therefore, that is -- there's some real good demand drive there. And we'll launch in a couple of weeks actually, our new well-being proposition, our protection well-being proposition, which brings together the protection and health proposition.

So it's much easier for our customers to be able to navigate their way around that and utilize both products in line because obviously, quite often we have corporates that have got their health and their protection product with us. We have been very disciplined on that. We used the word disciplined a lot this morning.

And I'm not going to apologize for that, we're an insurance company, that's what we should be doing. The health combined operating ratio remains strong in the low 90s. It has been consistently like that as we've navigated through various periods over the last number of years, and that's in line with how we manage the business.

So when we set the GBP 100 million target or operating ambition, obviously, that was an ambitious target, and we were operating in a different market. There's now lower demand. But the way that we look at these things is we push hard to meet the ambitions that we've set. And so we believe that we are on track for that GBP 100 million operating profit in-house this year. In terms of Direct Line, so maybe I can talk a little bit about the progress on the integration, and Charlotte can come back on your point around the expense synergies.

So I think obviously, the integration is going really well. And we've taken a swift amount of action right across the business. So whether that is getting the pricing models in place, getting the fraud models in place, putting Direct Line on all the 4 major price comparison websites.

And by bringing together, by doing that and bringing together all of the data set, we've been able to enhance the pricing across the book. We've also been able to broaden the underwriting footprint. And that change of marketing from less direct marketing to more PCW, obviously, that changes that does change the expense as well as anything else.

Also, we've harmonized the supply chain. So 60% of the supply chain spend is already shared. So we focused on harmonizing the rates that we pay. And we've also streamlined the nonclaims suppliers. So 70 of those already and more under review. We've made really good progress on the -- what we call the TUPEing, the movement of colleagues from one entity to another, that will complete later this year. And we've also made good progress on the new lines of business, the micro SME, the pet and the rescue, where we see that there's loads more potential.

So I think all of that combined, I mean, I was speaking to the team last week. And what's really interesting is that, yes, we've got all of the benefits from these models, and that is phenomenal. but you also have the added benefit of scale. And by having these 2 books of business that come together, we can not only apply obviously the models across a wider book, but we're just able to make better pricing decisions because we've got more data. And that is the bit that we are really seeing starting to benefit the underlying performance, which will obviously come through over time. Charlotte, did you just want to talk about that?

Yes. Just on the actual synergies themselves. So if you remember back in November, we said we set the synergy target of GBP 225 million to be delivered by the end of '28. And then we said that at the end of '25, we had achieved GBP 50 million of those run rate cost savings, of which GBP 10 million were recognized in year in '25. And for '26, GBP 50 million kind of starting at the beginning of the year and running through. Obviously, we're continuing to work away.

And so some of the cost savings that linked to the initiatives that Amanda mentioned will be realized in year. some will kind of come towards the end of this year. The capital synergies are linked to 2 things, the major model change and the Part VII. Obviously, at the point that we achieve the Part VII, which is the end of this year, then quite a lot of the legal entity structure that there sort of collapses and you get an additional moment when there's quite a lot of cost savings to come through. So I think originally, we guided to the sort of the GBP 225 million being relatively spread with fully run rated through by '29. We'll give you more updates at the half year, but we remain completely on track.

Our next caller is Nasib Ahmed from UBS.

Just 3 from me. Firstly, on Canada combined ratio, it's around 92%. I know 2Q and 3Q is high on weather, but is there anything else in the 92% like PYD that makes you comfortable about approaching the 94% because the run rate is actually better at the moment? Secondly, on the Health business, you've got GBP 30 million of earnings to come in '26 growth in earnings to reach the GBP 100 million. I think you were at GBP 72 million last year, but your top line is reduced. So how do you like what are the moving parts to get there to the GBP 100 million target for this year? And finally, on the solvency bridge, I think you get to around GBP 180 million already if you add direct line, so 171 plus 7 points. Can you kind of bridge the moving parts, what is the OCG contribution net of the dividend? And I think the buyback already excluded.

Yes. So I'll start with Canada combined. So look, I think it's -- as I said in my opening remarks, the Canadian combined ratio is a function of the profitability actions that we've been taking, and it was a more benign weather quarter relative to last year, but it was consistent with the weather loadings that we have for Canada in Q1, but they're not the heaviest weather quarter. We'll unpack all of the components of core at the half year. At this stage, I'll just give you a bit of that color.

So it is the improved profitability actions that we took. There is a modest amount of PYD kind of across the group this time. But as I say, I'll give you more detail on that at the half year. But assuming that the loadings for weather operate as we would expect, which they have in Q1, we would expect a heavier one in Q3, then we absolutely see the pathway to approaching 94% for Canada.

I'm not sure I've got a lot more to add on Health. I mean there's not that many moving parts in the combined operating ratio you've got your premiums and you've got rates flowing through and there's been good rate going through the portfolio. Medical inflation is high, and we're carrying that rate. And then you've got your expenses. And as I said, it's the combination of us looking at all of that, which gives us the confidence of getting to the GBP 100 million. I don't think much like I can actually add On the solvency bridge.

So solvency bridge. So yes, so it is obviously early in the year to kind of bridge to the full year. But I think, as you say, there's the 7 points that we guided to coming from Direct Line. There's probably, if you think about the sort of regular capital build each quarter, then if that's 3 a quarter plus a little bit for management actions, then I would say that's a 12-point build for the remainder of the year. So that's 12 up, 7 up and there's probably about 5 to pay for the interim dividend.

Those would take you to mid-180s. That's sort of excluding market impact, either positive or negative, which I think makes sense because as you can see from activities were relatively insensitive to movements. And even if I look at what's happened since Q1 with swap spreads being around 20 points up, the sensitivity means that kind of that's relatively small. So those are the main obvious blocks and then there's the kind of market moves.

Our next caller is Andrew Crean from Autonomous.

Sorry, I'm going to come back to the BPA thing. Low teens IRRs, given how little capital is being used now in the sort of gilt heavy strategies, doesn't argue for a substantial decrease in the profitability. Could you just talk a little bit about -- when you say low teens, are you loading it to 100% solvency or a higher rate of sort of 175%?

Secondly, I wonder whether you could give us the new business profits for the Wealth division, which you used to give? And then thirdly, could you talk about the growth in your direct wealth business? And how big in assets is your direct wealth business now?

Thanks, Andrew. Charlotte, do you want to pick up the first one?

Yes. So look, on the IRR, we do allow for solvency buffer in that. So it's kind of more like the 145, 150-ish kind of that sort of level. So it's not just a pure 100. So I think we are factoring in fully the capital strain that's on there in a real way and achieving more than the weighted average cost of capital.

So look, on the metrics that we've given for wealth, look, we think that the business is best modeled using flows, revenues and expenses. And kind of at the back, we've given you the gross flows, so Page 6, which we historically have only given at the full year.

In our view, that is the most relevant way to view the business and kind of rather you focus on it like that. I know that in the past, people have liked to add up the components for an IWR, but then it's been dominated by the wealth piece, which, for which this metric is the least relevant. So we are moving away from that metric going forward.

And on direct wealth. So we've made really good progress in direct wealth. Customer numbers are up 30%, and they've now passed the 100,000 mark and the net fund flows are up 56% as we continue to see strong demand, particularly in the weeks prior to the tax year-end. So we expect that to continue to grow, obviously, using brand, enhancing the proposition and the way that we optimize our marketing.

I think the other area, obviously, of focus here is the introduction of the targeted support rules. So I think they've definitely got the potential to transform how we support our consumers with their pensions and their investments. And we're developing that targeted support service, and we're now in the process of seeking the formal regulatory approval, and we're aiming to launch that in the summer. So our first 2 use cases are going to be in the pension space, which are slightly more complex, but that's where we believe the bigger opportunity.

And obviously, that plays into stimulating U.K. growth by enhancing customers' access to the financial product. It's innovative, and we're reducing the -- there's some reduction in regulatory barriers. So we honestly believe there's a really huge opportunity for us here, given the size of our customer base across that sort of wealth and the heritage book and possibly utilizing artificial intelligence with our position in workplace. So that sort of all flows together in terms of supporting that continued growth in direct wealth, Andrew. So we're quite keen on that, obviously.

So what were the assets in direct wealth AUM?

What was that guys? we got that here.

It's about GBP 4 billion, I think...

Our next caller is Larissa Van Deventer from Barclays.

On my side, focus on 2, please. The first one on commercial pricing, you mentioned the soft pricing environment. Could you give us a sense of your outlook for when it may harden and to what extent along with your expectations for retention if you do if you keep your pricing elevated. The other one is on Workplace, very strong flows now up 71%. Should we take this as the new normal? Or are there one-offs that we should take into account when we consider how this may grow going forward?

Okay. So Larissa, I obviously spoke quite a lot about commercial lines earlier on. So maybe I'll just focus more on your the outlook point because I think we've told you where we sort of are where we are today.

So look, I think the outlook suggests that pressure will -- on rates will remain with elevated competition throughout the year. But just to be clear, I can use the same word, underwriting discipline is firm. I've talked to you about our rate adequacy. And the rate dynamics do vary line by line. Some lines are still positive. Others are not. I won't go through the whole 20, but I think if you looked at the March index, it wouldn't be dissimilar. We would be seeing the same sort of things that there they're seeing. In terms of opportunities, though, they do still exist.

We've talked about the dual platform, the new -- the 7 new products we've been able to launch through Probitas, the specialty lines, and we will continue to prioritize margin over volume. I don't have an indication of when the market will harden.

I just, I can't tell you that. I think we would say that certainly for the course of this year, we would see it being similar to what it is today. Clearly, tactics and everything else will change by different insurers according and responding to that. But I think that with an insurance business, and like I say, been in this for such a long time, the absolute key thing is to keep your discipline in a soft market to keep your relationship with your brokers strong, to look after your customers, to be there when they need them so that when the market hardens, you've got all of those relationships and you've got everything that you can really work on.

And that's the way that we will be playing it. We're not in this market out of this market. We are long-term players as we always have been, and that's the way that we'll be continuing to focus on it, whether that's in the U.K., in Ireland or in Canada. In terms of workplace, remember, Charlotte actually said, we lost a large team in the first quarter of last year.

So there is an element of that in the first quarter of this so I think that's how you should think about it. But also, I would say the momentum is incredibly strong. You're looking at this GBP 1 billion of regular contribution monthly coming from the existing schemes, a high retention rate, a high win rate, 112 new schemes in the first quarter and the Mercer scheme still to flow through over the next 12 to 15 months.

That isn't in these numbers yet at all. We started that in April, and that builds over the period. So I think more to on catch up on.

All I would say is don't build your model on 71% each time, but GBP 2 billion of workflows plus kind of like thinking all of those factors, that is par for the course.

Our next caller is Fahad Changazi from Kepler Cheuvreux.

Could I just ask a bit more about the U.K. commercial? You mentioned 60% was mid-market, presumably that's Q1. Could you just tell us sort of how much is GCS for the whole year? And can I just confirm you said Q3 and Q4 -- Q2 and Q3 were important quarters for GCS. Could you just confirm that? And the other thing I just wanted to ask about was on Canada. You were rolling out your -- to replicate your garage network, I believe, in Canada which you have in the U.K. I was wondering how that was progressing.

Okay. Thank you. So on the way to think about commercial lines, and I think Charlotte said, so looking at the whole portfolio of the -- what we call SME, which I admit is very confusing, is what we call internal U.K. commercial. Mid-market is around 60% of that with the balance being digital and schemes business. And then obviously, we've got the GCS business and the Probitas business that sits on top of that.

In terms of the way that in the GCS business, the larger business, the way that it works is that -- and these are not exact numbers. Q1 is about 20%, Q2 is about 30%, Q3 is about 30% -- sorry, 20% in Q4 is about 30%. 20 ,20, 30, 30 I think that spread that up to 100%, I think. So I think that's pretty much how to think about it.

And April has got off to a good start on that. As far as the garage network in Canada, so yes, we continue to invest in that garage network. The ambition is to in-source the claims value chain because obviously, we see the real benefit of that in the U.K., where we've got an average cost per claim saving of around GBP 500.

I think we talked about that at the full year. So as we sit here today, the Aviva Auto Care centers in Canada accounts for around 10% of claims. We'd like to bring that over 30% over time. And coupled with the deeper relationships with our dedicated suppliers, that will improve the overall indemnity spend, we believe, considerably. So in Canada, the severity savings from what we call our captive shops are currently averaging around $518 per claim with about -- with year-to-date savings relatively modestly when you just started it.

So we continue to strengthen the network, and I guess we'll have more to say on that. And the brilliant thing here is that the solus team in the U.K. have been spending time over in Canada. They've helped the team set up the garages. So we feel very, very positive about that.

Our next caller is William Hawkins from KBW.

I would like to come back to expenses, please. I'm picking up what you said to Thomas. On the non-life side of the business, I've been doing a lot of work, and it still stands out that Aviva's expense ratios in non-life are a lot higher than the other big 5 composites. There may be big problems of definition in this, which I accept. But I guess I'm just kind of wondering when you're doing your own assessment about where you've got best practice and where you can improve, what are you looking beyond direct line? Is it just all about the direct line synergies? Or is there a lot more stuff that you can do? I'm not suggesting cost cutting is the only thing in life, but the difference in the ratios is quite an outlier.

And then secondly, please, also just back to how you're thinking about how the synergies play through. So if we take 2028 non-life expenses relative to 2026, are they going to be lower because of the synergies? Or ultimately, could they still be flat or higher because you've got all the other drivers like business growth and passive inflation? And obviously, you're still going to be investing in the business.

Okay. Thanks for the questions, William. So obviously, I don't know the data that you're looking at. But if I think about the non-life expense ratios for Aviva, this is here you have to look at the -- what the business mix actually is. It's purely a symptom of business mix. with Aviva, we have got, yes, a big direct business, but we've also got a very big intermediated business, and we've also got a very successful partnerships business.

Now in that partnerships business, obviously, we are taking the expense and we're managing those very profitably within a range of combined operating ratio where we're protected on the downside. And in the intermediated business, you've got the commission which is payable. So you've got to look at all of those things together.

So I think, honestly, having tried to do this for many years, it's almost impossible to put every business side by side unless you know exactly what the business is. The other point is some of the bigger insurers will write a lot of business net and not with full commission, whereas a lot of our business is SME mid-market, and therefore, we will write that with commission. So difficult to see through.

The other thing, I think, which always has a little bit of a specialty in the mix here is the way that you look at in-sourcing and outsourcing and things like adjusted costs on claims. People deal with those differently. And so your point around definition is very well made. There will be major definitional points depending on the way that you're looking at it. So I mean, look, very happy to sort of take it away. And we will have, obviously, at the full year and half year, we always have more exposures. But what we see is our expense ratios improving and continuing to improve over time. But you're never going to be able to remove that element of commission of the intermediated costs when you've got such a big intermediated book of business. I don't know Charlotte whether you've got any more to add on that.

Not really other than to give you the assurance that we're very focused on costs. And internally, we're always doing what benchmarking we can do and focusing on what good costs are.

So if there's volume-driven cost and it's supporting top line and customer growth, then obviously, that's really important cost, whether that's marketing or making sure that we've got the personnel to be able to deal with it, always looking at how we supplement people costs with automated abilities to make them more efficient. There's ongoing inflationary pressure that we have to look at for our workforce. We have good contracts with outsourcers to kind of manage and keep on top of that, but there is constantly the battle against inflationary pressure. And then we're always looking at how do we drive productivity and savings, how do we kind of do things best both for the customer and from an efficiency perspective.

And all of that kind of continues. So I think as we continue with the efficiencies out of Direct Line, that will drive -- that's kind of 2 points of the EPS development. We've got 2 points of business improvement coming across the piece, which -- some of which will come from efficiency savings -- sorry, 7%. And kind of like -- it's all together, but you can be rest assured that we are very, very focused on it.

Sorry, can I come back? Does that can?

Go ahead, Yeah, go ahead, William. That's fine.

Sorry. Just to push you, I'm still just trying to get clear. Does that mean that 2028 expenses are highly likely to be lower than 2026 expenses? Or because of all the other moving parts, is that just too simplistic a way of looking at it?

I think that's too simplistic. We haven't made all the decisions that will drive us through '28 yet anyway. If opportunities come, like if partnerships come and we have to add cost in order to do that. I mean there's so many different -- and then there's the inflationary drivers. It's too simplistic, but we'll be very focused on the ratios and keeping it as efficient...

And look, we sit here today, think about artificial intelligence and what benefits that can provide to the business. I mean we're just at the sort of beginning of that. So I think it would just be impossible for us to say. But to just reinforce what Charlotte said, our focus is always on delivering the lowest cost because if we're inefficient, we pass that on to our customers, and they can make choices about where they want to place their business.

We need -- it's a competitive market. We need to be able to price well. And if we're pricing well, we have to have an efficient back end in order to be able to do that. And...

It's all about the efficient back end, Charlotte -- that's what I was saying, I think this is our last question.

Our last caller today is Abid Hussain from Panmure Liberum.

I've got a couple of questions. The first one, I'm sorry to say, is coming back on the BPAs. I'm just trying to understand what are your minimum IRR hurdles? It looks like your margins are now compressing and you're sort of at the low teens.

But that sort of low teens number is difficult for me to reconcile with those quoting a greater than 20% lifetime IRR. I'm just wondering if you can help us reconcile the 2. Is it something on the asset side, the capital side?

So just wondering what's your equivalent lifetime IRR, if possible? And just aside on that, would you ever consider switching to a capital-light fee-based model on BPAs? So that's the first question, slightly long, sorry. And then the second one is on motor. What's the claims inflation outlook that you're pricing for across the rest of the year? And then do you think that, that is broadly being priced in -- fully being priced in now across the market?

Okay. Charles, do you want to do the first one?

Look, I think on IRR, we sort of I think let's provide a little bit more detail when we do so at the half year, although I don't see that there's a huge amount of good disclosure on the methods that peers are providing either.

Ours is bear in mind the WACC, which is around 9% or so. It's definitely applying the solvency kind of buffer, if that's the right word. So kind of it's not just a required level. It's with the expected return or the return that we need on it. And low teens is, therefore, the hurdle and is a good use of capital and drives a good return on that use of capital. I think probably that's as far as I'll go today, but we take, I think, on board the feedback of people wanting to understand this a bit more and we'll do at the half year.

And then on the final point, so inflation -- motor inflation is around mid-single digits. And I would just say from our perspective, therefore, obviously, we are pricing for that. We are price adequate in the motor portfolio. And you have to layer on top of that the benefit I talked earlier about the supply chain, the models and the scale of the portfolio, which will allow us to drive, I would say, better prices out of our supply chain than perhaps others can, which will sort of mitigate some of that inflationary impact.

So we feel very confident about that. So I think that might be the end of the questions. I mean that has been a whole hour for a trading update, which is fabulous. Thank you all so much. I'm sure there will be questions you want to follow up with the team, please do.

We take on all the feedback about the IRR, and we will have a look at that. But it is only a trading statement, as we always say, it's been very good to answer your questions to get a feeling of what you're thinking about. So thank you very much indeed, and we look forward to seeing you soon. Thank you.

Okay. Good morning, everyone, and thank you for joining us today for our full year results presentation. I'll start with a quick update on our 2025 performance and how Aviva will deliver today and for the future before Charlotte takes you through the results. Then we'll open for questions.

So let me begin with the key messages. Aviva has delivered another outstanding set of results in 2025, extending our multiyear track record of delivery. We have achieved our 2026 targets of full year early and have now raised our ambitions. And we have enormous potential to go even further for the longer term.

We are set up to make the most of the opportunities across the market, whether that's with artificial intelligence as technology changes the game, general insurance as the importance of scale and brand grows, wealth as the market expands with regulatory tailwinds or in retirement for the next wave of pensioners as the U.K. ages.

And I'll cover some of these in more detail later. So let's get into the numbers, which include the 6-month contribution from Direct Line. As you can see, it's been a great year.

Operating profit rose 25%. IFRS return on equity increased and cash and capital generation are growing. We now have over 25 million customers and an opportunity to serve even more of their needs with over 7 million of those customers being multiproduct holders.

Operating EPS growth is well into the double digits. And today, we are announcing a final dividend of 26.2p per share, up 10% year-on-year. And we are resuming the share buyback now at a higher level of GBP 350 million.

Every business contributed to these results. In General Insurance, premiums are up 18%. We are now approaching the sub 94% combined ratio ambition, and we are already achieving this in our U.K. business.

In Wealth, we are extending our #1 position with over GBP 230 billion of assets. And we are growing with record net flows of almost GBP 11 billion.

In Protection, we have improved margins and are nearing completion of the AIG Protection integration program. In Health, we have grown in-force premiums by double digits with a low 90s combined ratio.

And in Retirement, we have written GBP 4.6 billion of bulk annuities at attractive returns, supported by real asset origination in Aviva Investors.

Turning now to targets. As I've said, today's results mean that we have already delivered our 2026 targets. This is a fantastic achievement, and I'm really proud of Aviva's performance. So I want to thank the whole Aviva team for their hard work.

In November, we set new 3-year targets across operating EPS, IFRS return on equity and cash remittances. These now include Direct Line and better reflect our trajectory as a diversified capital-light business. Charlotte will cover more details on the numbers shortly.

But now I'd like to talk about Aviva's longer-term potential. This has been a journey where we have driven sustained growth, served more customers and stepped up for shareholders year in and year out. And we continue to create longer-term value with smart strategic M&A resulting in today where we are the U.K.'s only diversified insurer with a clear strategy that is delivering results.

Our focus is now on hitting the new targets, further accelerating beyond 75% capital-light and realizing the full benefit of Direct Line. But this is just the next step in our journey. There is more long-term potential beyond this 3-year time horizon. Clearly, we are set up to capitalize on a range of opportunities across all our markets, but I'll prioritize three of these today.

First, how we outperform right through the cycle in General Insurance; secondly, why we are uniquely positioned to lead in Wealth; and thirdly, how we are using artificial intelligence to shape the future of Aviva. And supporting all of this is one constant, our leading customer franchise and preeminent brand.

So let's start with General Insurance. This is and always will be a cyclical market. And after more than 325 years in the industry, we know how to navigate cycles. And we have been through disruption time and time again. Direct Line changed the industry by selling directly over the phone. Price comparison websites then reshaped the market. And now we have generative AI with autonomous vehicles to come.

And through all of these changes, Aviva continues to deliver, bringing in fantastic people, launching innovative products like Aviva Zero, expanding distribution onto PCWs and through Lloyd's and so much more. And we have tripled profits over the last 5 years.

The U.K. is the most competitive insurance market in the world with high regulatory barriers to entry. And Aviva is the standout #1 insurer here and the only player operating at scale across Personal and Commercial Lines. We have always adapted and we will keep adapting.

When we acquired Direct Line, we knew that market conditions would continue to evolve. And the same is true when we set our new group targets. But we also knew that Aviva has the scale, discipline, technical expertise, proprietary data, brand strength and diversified group model to grow profitably. And there's plenty of room to grow, unlocking value from Direct Line, expanding partnerships, scaling SME in Canada, building out our Lloyd's presence, not to mention the opportunity with our 25 million customers.

The market will keep changing, and that's exactly why we invest in innovation. We are ahead on EVs, telematics, automation and AI, and we'll stay ahead. So our portfolio is built to deliver performance for years and decades to come.

Looking first at Personal Lines in the U.K. Owen and the team have a track record of outperformance, delivering profitable growth through COVID, periods of high inflation and pricing practices where many others struggled. And though the market is challenging today, we are still writing at target margins. It is not by chance that we have been able to do this. Our scale is unrivaled with breadth across distribution and game-changing amounts of proprietary data.

We have the only wholly owned repair network in the U.K., which saves us around GBP 500 per repair. And we have huge potential with Direct Line, not just with the cost synergies, but growth headroom with leading brands and new products such as Pet, Green Flag Rescue and Micro-SME.

Turning now to Commercial Lines, where it's a similar story. We are successfully navigating tougher conditions. We have built up our pricing strength, and we are able to quote above the technical prices in our models. Putting margins first has always been our priority, and that's why we have delivered consistent profits year-after-year.

We have unique strengths to win in this market. So let me just highlight a few. We are a leader in SME and mid-market, and these segments are more resilient. We have first-class underwriting with strength across motor fleet and liability. So we are very well positioned for any future shift with autonomous vehicles. And with access to Lloyd's through Probitas, we can tap into a wide range of attractive lines, having launched 8 since the acquisition. This now includes high net worth, which is complementary to our already leading proposition here.

So across both Commercial Lines and Personal Lines, we are well set up for success today and in the future.

Moving to Wealth, which is a huge opportunity for us. There are GBP 2.7 trillion worth of assets today, growing at double digits, and the market is set to surpass GBP 4 trillion by 2030. This strong growth is underpinned by clear structural trends and regulatory tailwinds. At Aviva, we have a leading Workplace and Adviser Platform businesses. And we are leveraging advice capabilities in Succession Wealth and scaling fast in Direct Wealth. We have built a competitive edge that no one else can match.

We have a leading customer franchise with a significant affluent opportunity. Our holistic offering and trusted brand means that we can support customers throughout their lifetime. We have always invested in our platform, which is ranked by de facto as the #1 in the market.

Our modern technology platform brings scale benefits. And of course, we have leading investment solutions with Aviva Investors. And the performance of our Wealth business is testament to all of this. Since 2022, we have grown assets faster than the market, and we have improved margins at the same time.

In Workplace, our profit margin is up by almost 2 points over the last 2 years, which makes this business a key driver of growth and a major contributor to our profits. So we are on track for our GBP 280 million Wealth profit ambition in 2027.

And the importance of Wealth within our portfolio is growing. It is fast approaching 10% of our group earnings, further increasing our share of attractive fee-based income. But the longer opportunity here is even more exciting.

Take Workplace. It is a highly attractive market, which has grown four-fold over the past decade. And with a constant flow of employer and employee contributions, it is expected to triple over the next decade. This growth is not only strong, but it is also very resilient.

Aviva has an incredible track record here, and we're accelerating. The business is a genuine growth engine with 1,500 scheme wins over the last 3 years and a near 100% retention. And we are very pleased to now be the sole administration partner for the Mercer Master Trust, expected to bring around GBP 8 billion worth of assets over the next 12 to 18 months.

The strength of our proposition is powered by leading Aviva Investors default funds. And we recently launched our My Future Vision Fund, which gives customers access to private markets and reinforces our commitment to the Mansion House Compact.

So when you bring together our Workplace, Direct Wealth, and Advice businesses, you get a truly unique Wealth offering. We are able to retain and serve customers from their very first job all the way through to their retirement. And we are tapping into 4.5 million affluent customers who hold more than GBP 1 trillion worth of assets.

We're also leveraging technology and innovation to deliver advice and guidance at scale. Targeted Support is a huge opportunity for us. This is a new service that sits between guidance and full financial advice, and it will allow us to offer easy-to-access support to so many more people.

Our first journeys here will focus on how people save for their pensions, launching around the middle of this year. And there's still so much more to share on the Wealth business. So we will do a deeper dive at the next in-focus session, which will be in Q4 this year.

Finally, turning to Artificial Intelligence. So we know that this is going to be transformational. And here at Aviva, we have a greater opportunity than most. For any opportunity that you have seen in the media, and there's been quite a few recently, there are key enablers that you actually need to drive the value. It is not enough to just have the technology. You need access to millions of customers, the ability to deploy and reuse at scale, capacity to invest, and most importantly, proprietary customer and claims data. Aviva has all of these in spades, and our diversified model is more resilient for any disruption.

This technology isn't new to us either. We have been using traditional AI capabilities for over a decade now. In fact, over 98% of retail business in U.K. Personal Lines is priced with machine learning. And we have been training over 150 machine learning models in claims with our own data for years.

Generative AI and Agentic are just the next steps on this journey. And because of our targeted investments in technology and talent, we already have many of the AI-ready foundations in place, so we are well positioned for this shift. We have built an in-house platform to deliver use cases at speed, and we are already seeing tangible benefits. We have halved the time taken to review each case in medical underwriting. And we have also reduced call wrap times by 20% for customer service agents in Direct Wealth, which we are now rolling out more broadly in IW&R.

All of our colleagues have access to AI tools, and we continue to enhance and streamline all of our data. We are proud of what we've achieved so far, but we are aiming much higher and always balancing ambition with pragmatism.

Our focus now is on prioritizing progressively bigger end-to-end opportunities where AI can transform areas like customer engagement and distribution, underwriting and claims right through to back-office operations. This is the kind of change that will shape Aviva's future. And some of this is closer than you think.

So let me give you an example in U.K. General Insurance claims. We have already saved nearly GBP 100 million through our claims transformation and Agentic has the potential to unlock much more. Over the next few months, we will be testing an AI-enabled claims agent built in-house and launching later this year. This will enable us to handle simple claims from start to finish without human support. And the best part is that this is voice-enabled. Most claims begin on the phone. So this will be transformative for customers, delivering faster, clearer and more consistent outcomes.

And finally, I'm delighted to announce our partnership with OpenAI, which is a really important step for us. Combining OpenAI's cutting-edge capabilities with our expertise and data will help us to deliver powerful AI solutions for our customers and our colleagues. So there's a lot more to come, and we'll share more with you at our half year results in August.

Now I'll finish with what brings all of this together. Aviva's powerful unique model. We have diversification and growth advantage with market-leading positions and a majority capital-light portfolio. We have a customer advantage with almost 22 million U.K. customers and a leading brand. We have a scale, technology and data advantage, including the opportunity that AI brings. All of this gives us real confidence for the future over the next 3 years and well beyond.

And with that, I'm going to hand over to Charlotte, who's going to take you through the results in more detail.

Thanks, Amanda, and good morning, everyone. It's great to be here for another full year results presentation.

2025 was a strong year for Aviva once again, as we continued our growth momentum. Operating profit was up 25% to GBP 2.2 billion, which translated to an EPS of 56p and a return on equity of 17.5%.

Cash remittances were up 4% to GBP 2.1 billion, and this excludes the funding for Direct Line, which is reported separately. Solvency of 180% is at the top end of our working range, supported by GBP 2.3 billion of own funds generation or OFG, the solvency measure of operating performance.

In November, we said we were on track to meet our 2026 group targets a year early, and I'm pleased to confirm that we have achieved that. We exceeded our GBP 2 billion operating profit target before the contribution from Direct Line.

The group total of GBP 2.2 billion is in line with November's guidance. And we comfortably achieved our OFG target a year early and are ahead of schedule on our cash remittance target. This demonstrates the grip we have on performance management to actively manage through the cycle and outperform peers.

So given our excellent progress, we set new and ambitious 3-year targets in November, reflecting the shape of our group today and our plans for the next 3 years. These targets allow better comparability with peers, align with our capital management framework and support our plans to grow in capital-light businesses. These targets are ambitious and achievable. They take into account the outlook for each business, including good visibility of where we are in the cycle.

So we're targeting an 11% operating EPS CAGR from 2025 through to 2028. This reflects the operating earnings growth and share count reduction from regular and sustainable capital returns. So our 2025 EPS of 56p is ahead of the 55p baseline that we set in November, as the last few weeks of the year saw more benign weather than expected.

And we're not assuming this favorable weather repeats. So the 11% target is from the 55p baseline and builds to around 75p by 2028. We're really confident in our plans to drive progressive earnings across the group. And combined with share buybacks, we're well placed to achieve this and our other group targets.

So I'll now unpack the group results in a bit more detail, starting with General Insurance, which was 56% of business unit operating profit. Top line growth has been an impressive 14% over recent years, and margin has improved too, with the combined ratio better by 1.6 points. The investment return has grown in line with the portfolio, all of which together means operating profit has grown to almost GBP 1.5 billion.

In the U.K. and Ireland, premiums grew 27%. A large component of this was the addition of Direct Line reported as part of U.K. Personal Lines, where we saw 50% premium increase.

Commercial Lines premiums grew 7% as we build GCS, integrate Probitas and leverage the strength of our SME and mid-market propositions. The combined ratio in the U.K. for both Commercial and Personal Lines is a strong 93.9%. This is a 1 point improvement, reflecting the earn-through of pricing and some favorable weather.

In Commercial Lines, positive prior year development was more than offset by elevated large losses in the current year. And including Ireland, COR was 94.1%, reflecting the impact of storm Eowyn back in Q1. Overall, operating profit for U.K. and Ireland grew 52% to over GBP 1 billion.

Now in 2026, growth will benefit from a full year of premiums for Direct Line. Now looking at the U.K. and Ireland business as a whole, we expect to deliver a 2026 combined ratio of better than 94%, subject, of course, to normal weather patterns. We come from a position of strength with good rate adequacy and relative to the softer market, we have held rate. We leverage the strength of our brand, scale, pricing sophistication, proprietary data and diversification. And we have extensive experience in managing pricing cycles and disruption. So we're really well placed to navigate the current conditions.

Premiums in Canada, up 2% in constant currency. The Canadian market is at a different stage in the pricing cycle compared to the U.K. And so Personal Lines grew as we secured pricing increases across property and auto, maintaining strong retention. This was offset by some portfolio actions taken in Commercial Lines that I covered at the half year. And the undiscounted core was almost 3 points better, largely reflecting weather experience, which was broadly in line with our budget compared with the elevated cat activity in 2024.

There was improved large loss experience compared to '24 as well as pricing actions earning through. Investment income was marginally down, but operating profit was up 49% to GBP 408 million. And for 2026, we expect to deliver a combined ratio approaching 94% for Canada.

The Personal Lines rating environment remains supportive with further pricing increases expected. In Commercial Lines, though, the dynamics are similar to the U.K. with softer conditions that vary line-by-line. So across the portfolio, we will navigate the cycle with discipline.

Now moving to Insurance, Wealth and Retirement and starting with the Insurance businesses, Health & Protection.

Demand for Health has been affected by cost of living pressures for consumers and small businesses re-prioritizing spend to absorb the national insurance changes. Despite this, in-force premiums were up 12%, and we maintained a low 90s COR. Operating profit was up 9% as the business grows in line with our ambition.

Now as expected and in line with the first 9 months, protection sales were lower following the consolidation of AIG and Aviva propositions back in August 2024. Margins have improved by 90 basis points as we reprice the business. And all of this is in line with our integration plans.

Operating profit was up 97% as we had some adverse assumption changes back in 2024. And in '25, we recognized a onetime integration benefit following the legal transfer of business acquired from AIG.

Now moving to Wealth. Workplace net flows were up 6% as member contributions grew and we onboarded new schemes. The resilience of this business is demonstrated by the impressive GBP 1 billion of regular monthly contributions.

Our Adviser Platform performed strongly with flows up 11% despite elevated outflows around the time of the U.K. budget.

And in our Direct business, the customer base grew by almost 1/3 to over 100,000, and we're continuing to invest in developing the proposition.

Wealth operating profit was up 36% with operating margin improving by 1.1 basis points as the business grows and leverages the cost base. Operating profit as a portion of revenue is 23%, up 4 points.

And as Amanda mentioned, we are on track to meet our near-term ambitions. And beyond that, the opportunity is even more exciting for the group's long-term growth. We have a strong brand proposition and scale from which to build. So we anticipate further improvements in operating margin and profit progression.

In Retirement, we wrote a more typical GBP 4.6 billion of BPA following an elevated 2024. Importantly, Aviva Investors originated GBP 3.5 billion of real assets to support the business. Now this is an increasingly competitive market, and our team has continued to trade well and with discipline.

We achieved a mid-teens IRR, well above our low teens guidance, and the business has been written a relatively low strain. Individual annuity sales were up 19% to GBP 1.6 billion, our highest level since 2015 pension reforms, supported by a new product launch.

Operating profit was 5% lower as higher releases from the contractual service margin were offset by a lower investment result. And we expect to remain active this year in retirement, and we'll be disciplined in the competitive environment.

Now turning to costs and efficiency. The ratios are broadly stable despite the temporary uplift effects from acquisitions and new partnerships. Across the group, we continue to invest in exciting growth and productivity initiatives, including the use of AI and in automation. And we expect this investment to drive efficiencies in each of our businesses. It will improve operating leverage and unlock significant long-term value from our extensive customer base and proprietary data.

Now the application of our consistent capital allocation framework is a critical part of what we do to optimize our diversified group. And this slide summarizes how we think about performance and financial strength and what that means for uses of capital.

We continue to build sustainable growth in earnings and cash and work to maintain our balance sheet strength. We grow the regular dividends. We invest in the business for growth and efficiency, and we return capital to shareholders. Nothing here is new, but it's important that you see we do this really well. And as an example of the framework in action, I'll pause for a moment on solvency.

One of the advantages of the model we have built is proactive balance sheet management. A year ago, our cover ratio was 203% as we prepared to complete the Direct Line transaction. This used 31 points of capital ahead of the realization of the capital synergies. We've delivered elevated management actions of 11 points and accelerated 3 points of Direct Line synergies by temporarily moving the business to standard formula. This has supported building solvency back up to 180%.

The underlying capital generation of 16 points includes a couple of points of favorable one-offs, including positive weather and reinsurance pricing impacts, which we can't assume will repeat, but we do expect to unlock the remainder of the Direct Line synergies. Specifically, we're on track to deliver at least GBP 350 million or 7 points of solvency around the end of this year.

And looking forward, we expect a progressive build of operating capital generation of around 20 points in 2027. This assumes normal levels of management actions of around 200 points. And depending on whether these impact own funds or SCR or both, this translates to between 2 and 4 points of solvency. This level of capital generation will continue to grow and provides headroom in excess of the annual dividend and regular buyback.

Now moving to a few words on Direct Line. The integration continues to progress well and at speed. We have successfully implemented our pricing models into Direct Line with an improvement in written calls in the fourth quarter. We've made excellent progress on the Direct Line branded PCW sales, doubling the number of policies in Q3 and almost doubling them again in Q4.

We've transferred GBP 2.9 billion of assets to Aviva Investors with more to come. And we've made good progress rationalizing two office locations and three motor repair sites.

We're progressing and removing duplicate roles and have an incredibly strong leadership team in place with a proven track record. All of this is enabling us to deliver material financial benefits.

So in November, you'll remember, we uplifted our cost savings ambition to GBP 225 million and confirm Direct Line's own cost program of GBP 100 million had been achieved. We have delivered the first GBP 50 million of cost savings in the second half of 2025. This will fully earn through in '26 and contributed around GBP 10 million to operating profit in 2025.

We expect to deliver the remaining GBP 175 million of savings fairly evenly over the next 3 years. And we're also investing around GBP 50 million to unlock claims cost benefits of at least GBP 50 million each year. And all the work on the acquisition balance sheet has now been completed.

Now I'll briefly cover the delivery of our commitments on dividends. Today, we've announced the final dividend of 26.2p, giving a total dividend of 39.3p, a 10% increase on 2024. This includes the regular dividend growth plus the 5% uplift we promised following the acquisition of Direct Line.

We've also resumed the buyback, launching a new GBP 350 million program increased to reflect the higher share count. And as we go forward, our consistent dividend policy of mid-single-digit increases in the cash cost of the dividends builds from this higher point. And combined with the resumption of the regular buyback, this will deliver a highly -- a higher progressive DPS development.

So to summarize, 2025 was another great year for Aviva and the outlook for '26 and beyond is positive. Our diversified business model and the addition of Direct Line leaves us well placed to continue our track record of growth and earnings momentum. We will continue to invest in data, customer engagement and operating efficiency, ensuring we keep winning in an ever-changing world. And of course, we will maintain a firm grip on performance management across the group. All of this gives us great confidence in delivering the ambitious targets we have set and the future beyond that time frame.

And with that, I'll hand back to Amanda.

Okay. Thanks, Charlotte. So before we move to Q&A, let me conclude with the key points. We have real momentum, and we are building on it every single year. 2025 extends our track record of strong profitable growth. We have already delivered another set of targets, and we are driving towards the raised ambitions that we have set for our next chapter.

Aviva is in a stronger position than ever. And this isn't just a strong position for the next few years. Aviva is uniquely placed for longer-term success.

Here is why. We are the U.K.'s national champion and the only diversified insurer. We are accelerating capital-light and unlocking higher returns. We have an outstanding customer franchise of more than 25 million customers globally. We are the U.K.'s most trusted insurance brand. We have proprietary data at scale, driving better pricing, better risk selection and better customer outcomes.

And all of this fuels our superior returns for shareholders with strong and sustainable earnings growth and attractive dividend and regular share buyback. So these strengths and many more give me deep confidence that we will unlock the full potential of Aviva in the years ahead.

So thank you for listening. Let's move to your questions.

Thank you. And as usual, if you just raise a hand and give us a moment to get a microphone to you. We'll start at the front here with Andrew Baker.

Andrew Baker, Goldman Sachs. First one, I guess, on your '26 combined ratio guidance. If I look at U.K. and Ireland, I think the underlying is about 96.7% in 2025. So it's quite a jump to get to less than 94%. So can you just help us with the bridge there?

And then similarly on Canada, how do you get from sort of the 96.5% underlying to approaching the 94% that you've highlighted?

And then secondly, I can see you added a slide in the appendix giving a bit more detail on autonomous vehicles. Are you able just to give us sort of your view on maybe the timing here, opportunities, threats and I guess, ultimately, how you think Aviva is positioned to win in this market?

Okay. Charlotte, do you want to take the first one?

Yes, I'll take the first one. Thanks, Andrew. So look, I'll start by saying we're very pleased with the COR of 94.6% for the group. And underlying COR has increased across the group from 1.4% to 96.7%. But I'm very comfortable with the position. So let me try and explain.

So in Canada, we've seen about 0.7% of improvement in the underlying as we've seen price increases earn through, and we've seen auto theft trends improve. And we see having put around 10% through in Personal lines and those trends continuing, we can see the continued trend towards the sort of approaching 94%. We took those portfolio actions in the Commercial book. So again, some of that profitability will improve as a result of that, already coming through in the second half, but you'll get a full year effect of that.

In the U.K., yes, the underlying COR I've got is 96.3%. But in there, you've got some elevated Commercial Lines, large loss experience, which was kind of in the second half. So just as I won't assume weather is better than long-term averages and I don't assume prior year development coming through. I also assume that large losses will be at a kind of regular loss loading.

And when you look at the nature of the large losses, they were idiosyncratic in nature. So they were good underwriting decisions, just a bit of bad luck. So again, I wouldn't assume they repeat. Now they were about 1.7 points higher than the long-term averages or the loadings that we set. So if I take that off the 96.3%, you can see that's already quite a lot of an improvement.

Then I've got Direct Line coming in, in the second half, it's still not at the performance level we would want it to be. So it's got a negative impact in the second half. But as we see that earning through and we see more of the cost synergies come through, then again, that will drive a lot of the improvement. So we have the plans, and we've got the good line of sight to the guidance we've given.

On autonomous vehicles, so yes, we did put the slides in the deck because we sort of thought that there might be one or two questions on it. There's obviously been a lot of media activity on this in the last couple of weeks. But you've also -- you've seen sort of two extremes of that really. This is going to -- everything is doomsday scenario to the sort of major manufacturers coming out only last week and saying that they've abandoned their Level 3 driving system plan. So I think that we've got to just manage some of the noise that sits around the topic.

Now on saying that, we do recognize that this will bring a change in the market. And just the same as I think we've adapted to hybrid vehicles, to electric vehicles, pricing sophistication, now generative AI, I think we sort of feel very ready for this. Our view is we've looked at the WEF analysis and the BCG analysis. And we would concur that the widespread adoption is not expected until the 2040s.

And even then, I think if you think about the upgrading of the car park globally is going to cost trillions of dollars. I mean, I don't think we should just underestimate even that an average car price today versus what it costs to have a fully autonomous vehicle, you're talking about tens of thousands of cost difference.

So I think you sort of have to balance that. But when it comes to it, who's going to win in this autonomous vehicle world? Well, I think, first of all, this is the most competitive market in the world, as I said in the presentation. So I would bank on the U.K. being able to deal with this. We've got a deep -- as Aviva, we have deep understanding of vehicle technology. So we are the #1 insurer for EVs today. We have our own repair network. So the feedback loop in terms of that repair is going to be important. We've got -- we're one of three telematics players in the market. We've got about 3 billion miles of telematics data since that product was first offered. By the 2040s, as you can imagine, we're going to have a lot more data. So all of that data will matter.

But I think ultimately, you're never going to have this as being a pure Commercial Lines product because at some point, the vehicle may get stolen, and I don't think that the vehicle manufacturer is going to take responsibility for that. There will be times when the vehicle is being driven in difficult driving conditions on country roads where it's not going to be fully autonomous. And so what you're going to need is this balance between Personal Lines and Commercial Lines. And I would put Aviva out there to be able to deal with that as probably the only player in the U.K. today that actually can.

So I think we have to be circumspect about it. We have to recognize that the market will change. But I think genuinely, we are thinking it's a good way off. But we thought we'd put the slide in because we thought you may be interested.

If we come to Farooq.

Just one numbers question and one non-numbers question. So on the numbers, I noticed your investment income in General Insurance was up quite a lot, certainly compared to what I expected. Is that a sustainable level? And will that get the margin with the unwind of the discount as well? I mean, can we expect that to sort of be a sustainable level that might grow from here?

And then secondly, on -- going back to AI, I mean, there's also been a lot of kind of wild scenarios about how Wealth will be affected by AI and how distribution will be killed and margins will disappear and lots of doomsday stuff on that, too. So what are your thoughts on Wealth, particularly around Targeted Advice and how you could use Gen AI to your advantage?

Okay. Yes. So I think nothing particularly to call out on the investment income. It is obviously affected by having the Direct Line portfolio. But the rates that we were earning is pretty consistent. So LTR as a percentage of average assets aligned to the prior at 4.2%. So nothing untoward or nothing particularly to call out in the investment income. So, no.

Okay. So on AI in Wealth specifically, but I think more broadly. If we think about the investment that needs to go into AI and how you will reuse that across the business, I think if you think about Aviva, if you think just even on claims summarization, we've taken things for motor that we will apply to home, to travel, to health, to protection, to various other areas.

So if you think about the investment spread across the business, we feel that we're in a good position to be able to sort of get more maximum use and maybe keep more of the benefit of that and not pass all of that on to -- in a competitive environment.

On Wealth specifically, if we think about this new term of the moat, which is obviously new to all of us in the last -- the AI moat, like what is Aviva's AI moat? And I would say that one of the biggest moats that we have is our workplace pension business. Why is that the case? Because it is basically connected to employer, employee and provider. And effectively, with 4.5 million workplace pension customers, with the data that we have on those customers, we know what they are saving and the ability for us to be able to use AI and all the other data that we may have on them from things like motor, home and everything else to be able to provide a more personalized proposition via targeted support or simplified advice or going right through to sort of the full fat advice.

I think that we're in a really good position to be able to capitalize on that. So I think we've seen disintermediation in many places before. Take price comparison website. I mean that massively transformed the motor market and disintermediated to almost a whole extent where today, 95% of quotes come that way. As a mass affluent player, we are in a perfect position to be able to manage that any potential disintermediation. But I still believe that advice will be there. I just think that the advisers will be given better information, more support, and they'll spend more of their time with the customers, where the customers want that face-to-face advice.

But I think for those many people, 91% of the population today that don't take advice. AI will facilitate the ability to be able to do that and mean that they will get better guidance. And you've got 12.5 million people in the U.K. today that do not save enough for their retirement. I think it gives a real opportunity to be able to do that. So I would say we're bordering on the sort of excited end of the scale in terms of the opportunity that, that provides Aviva.

Larissa?

Larissa Van Deventer from Barclays. Three quick ones on my side. The first one, just on Canadian Commercial. Is the culling now done? Or should we expect some of that to linger into 2026? On the Life value of new business, if you could please give us a little bit more color on what drove the decline and how we should think about margin evolution going forward, basically was to separate the one-offs from any structural change that you may see?

And the last one on Workplace. You've been very positive on this for some time. What needs to happen for you to meet your targets? And do you see -- and specifically on that, how do you see margin or potential margin compression in that space?

Okay. So I'll pick up one and three and then hand over to Charlotte to take the margins bit of three. So on the Canadian portfolio remediation, yes, that is largely done. And I think if we think about Canada, we really see a big opportunity there to improve the performance of the Canadian business. I think there's a number of areas, a push out in terms of SME, a move more from Ontario as well as into Quebec, where we're not largely represented in Quebec today. We've got big partnerships with Loblaw and RBC, which we will be capitalizing on. And so I think the Canadian business has made some really strong improvements that they will continue to build on over the coming period. And that's why Charlotte was able to give the guidance that she wanted to there.

On the Life VNB, Charlotte, and then hand back on Workplace.

Yes. So I suppose there's a couple of things. In general, there's an element coming down because of the retirement levels of the BPA volumes being less. Then we've got a slightly strange effect coming through in Wealth in the fourth quarter, and that's allowing for some assumption changes, which kind of are relevant for the whole year, but they come through in the fourth quarter. There's a little bit -- so there's a little bit on Retirement margin and a little bit on Wealth. But I would encourage you on Wealth to always look at the flows and the operating margin and how we're improving the operating leverage there and therefore, the opportunities on the profitability. The VNB metric isn't that applicable, but we give it so that you can see the overall IWR level.

I mean on Workplace, so what gives me the confidence here? Well, I think the progress that has been made, you've only got to look at the sort of the progress towards the GBP 280 million ambition. And that is primarily driven by the contribution from the Adviser Platform and the Workplace business.

So Workplace AUM is up 19% to GBP 153 billion. So strong new business and growing member contributions. Net flows of GBP 7 billion, so that's 6% of AUM. We're getting regular GBP 1 billion member contributions every month. We talked about the new scheme wins, the win rate of 75%, which I think is pretty impressive. And so we've got a very positive outlook on Workplace. And we announced the new deal this morning with the Mercer transfer, that's GBP 8 billion being transferred in over the next 12 to 18 months. So I think the team are in -- they're doing exceptionally well here.

On the margin, Charlotte, do you just want to comment on Workplace margins?

Sorry, yes. On Workplace margins, we have shown the improvement in the operating margin. So if I look at it at the overall Wealth level, it's gone from about 7% to 8.1%. If I look at Workplace, which has not been so much diluted by some of the investment that we're spending, it's improved from about 10.7% to 11.5%. So all the pressure that you constantly always expect at the revenue margin level, which continues to be there, we're compensating by the scale that we have, the operating leverage that, that drives and that keeps going forward. And so, we also gave you a stat on sort of the expense margin as well, which is sort of like the inverse of a cost/income ratio. And again, that's showing an improvement to 25% now for the whole Wealth business.

So I think we've got to keep on it. We've got to make sure that we're protecting as much of the revenue margin as we can. And we do that through being competitive. We have to be competitive, but then there's a lot of incremental contributions into Workplace that sometimes attract a slightly higher margin per item. So we have to keep mind on that, but the real driver is making sure that the operating leverage continues to build.

Andrew?

It's Andrew Crean, Autonomous. Could you talk a little bit about Direct Lines, premiums and your retentions there? Is that working out the way you planned as you renew business?

Secondly, I noticed the CSM, the net flow -- value net flow is negative to the tune of about 2%. Is that something which you think will continue in the long term, i.e., that your releases will be more than your expected return on new business?

And then can you talk about U.K. retail pricing? What's happening in the market in terms of rates? And how you see rates going over this year?

Okay. Shall I pick up?

Yes, do pricing first and I'll do the two.

Yes. So on the -- we're not going to break down the individual brands, Andrew, in terms of like policy count or retentions because we don't do that for Quotemehappy, for Aviva Zero, and everything else. But what I would say is that I think we are incredibly pleased with the Direct Line deal. Actually, one of the real strengths in the Direct Line portfolio is the retention and their ability to retain. And we were with some of the teams earlier this week where their marketing team, particularly were commenting on the strength of the talent within the team around retention. So we feel very good that the team is set up to do that.

On the -- on the pricing of the portfolio, on motor, which I assume is the sort of where you're heading. So what do we think about this? So we always give you the numbers. So bear with me just a second.

So if we think about our performance in 2025 on Personal Lines motor new business, we were up about 1% on rate. I think the Pearson Ham data was showing rate down minus 11%. On home, we were sort of broadly flat, I think, on new business, and we were up about 8% on rate for home. So I think that shows really good discipline. And I think what it shows is us using our different distribution channels effectively. Obviously, we've got the Nationwide deal, which has come in for travel and home, and that will build over the course of this year.

In terms of what we see going forward, I think that obviously, we see inflation in the sort of mid-single digits. We've -- Charlotte talked about us guiding to overall 94%. So that will give you confidence, hopefully, that we will be disciplined. And we do see that the rates are starting to flatten out. And I think the competitors are saying the same thing. You saw the ABI data come through just a few weeks before. So we believe that it is time to start increasing the rates, and we will be very disciplined about how we do that in what is obviously still a competitive market.

Then on the CSM, if I look at it, excluding Heritage, it's pretty stable at just under GBP 6.5 billion. Obviously, with a lower volume of BPAs, you've got a smaller amount of that new business CSM going in. Then my interest accretion, that's a little bit higher because we had the higher opening CSM and because of the business written back in 2024, and that was written at higher rates than the portfolio average. So that's kind of driving that.

Then experience variances were broadly neutral, whereas the previous year, they've been a bit positive. And assumption changes are relatively minimal across the both. So when I look at the release, it's a bit higher because my starting point is higher.

Now if I put Heritage back in there, because that's got no new business and is only coming out, then there's a bit -- the reduction is down to 7.7% from 7.768%. So it's pretty marginal.

When I look at the percentage, the release is 10.3%. Again, that's slightly higher than the previous year, which was 10.1%. But that sort of level is expected to repeat. But again, it will depend a little bit on mix and volumes of new business written. But I think it's always important to remember, this is the capital-intense part of the portfolio, and it's throwing off cash that we're investing in Wealth and Health. And obviously, protection is within the CSM. But it's stable to level and obviously will be impacted by how much annuity business we write in every year. But again, it's only part of the picture for IWR.

Give it to Dom.

Dom O'Mahony, BNP Paribas. Three questions, if that's all right. Just one clarification on the Mercer flow piece. If I've understood that correctly, is that just straight GBP 8 billion to the flows sort of over and above what you would get normally? Maybe if you could just expand on that, that sounds very helpful.

Second question, just to come back on the investment income. I think opening yields presumably are lower than 12 months ago. Could you just speak to whether that -- well, firstly, whether that's actually right for your portfolio, but also whether that's a headwind to investment income across the different business lines and/or discounting and/or whether there's anything you could do to offset that?

And then the third question, just on the capital generation. So OCG underlying, I mean, much stronger than I was expecting with -- in particular, the SCR growth is interesting, because I think it was ever so slightly negative in the second half as in a release. Is that the reinsurance change that you referred to, Charlotte? I wonder if you might just expand on why the SCR dynamic within the OCG is so benign?

So I'll answer the first one, which is a very straightforward one. And then I'll leave Charlotte to answer the two difficult ones.

So look, let me just repeat your OCG question again. It's obviously strong, strong underlying and strong management actions.

The SCR, which underlying GBP 36 million headwind in the full year, I think it's about GBP 20 million better than it was in the half year, which implies an underlying release of SCR, a small one. I did this math on the gee, so I might have got it wrong. But I assume that the reinsurance piece that you just -- you spoke to earlier is an SCR release in the underlying?

That's correct.

Just wondering how big that is, whether there's anything else explaining the very good print there.

So within the underlying -- so management actions tend to apply only to really the IWR world and then we have a little bit in international. So anything that's sort of not run of the mill in the GI businesses still sits in underlying.

So yes, there's some approaching a point coming through from -- in the OCG from the reinsurance. There's a little bit of an additional benefit coming through from weather. Then we -- what else have we got?

Yes, that's the main thing. Then obviously, we've got the 3 points coming through from Direct Line moving that to standard formula in the short term. We did -- we talk about -- in the IWR side, we talk about moving to the -- moving the credit model and getting an improvement on the way we model credit risk. That's predominantly a benefit in IWR, but there actually is a little bit of a benefit coming across the other areas as well. So that's also impacting the SCR as well.

And sorry, just to clarify, the Direct Line model change, that's going through the underlying, not through the other?

Yes, that's right.

Okay. Understood. That was very clear.

And then what was your -- your other question was on investment income again. I mean, there's really not a particular headwind. It's a very consistent portfolio. We've got the bigger size and scale because the book is bigger. Then we've added Direct Line. The mix of assets is similar. We've moved the assets across to Direct Line. That's a helpful thing from an investment income perspective as well as fees for Aviva Investors. And then again, nothing much. There's a bit of a mix point, I suppose. And overall, it's a little bit helpful for discounting, but nothing really major to call out.

Mandeep?

Mandeep Jagpal, RBC Capital Markets. Two questions for me, please, both on Life. Firstly, given the fixed income market conditions, how have you invested your annuity premiums you received in 2025 versus your target allocation? And does the current allocation create an opportunity for more management actions or margin enhancement in the future?

And then on the Retirement IFRS earnings, in the appendix on Slide 56, it looks like experience variances, the line there was quite negative for both operating profit and CSM. Could you provide some color on what drove that negative line? Is there anything to call out here in terms of changing trends in longevity or mortality in the U.K. post the COVID period?

Right. So the first question was on the mix of assets supporting the Retirement business. I mean, in general, we've continued to keep a low reliance on corporate bonds in the low spread environment. So that's meant that we've largely written at a relatively low capital spend.

When I look at the mix between liquids and illiquids, it's still kind of around the target mix that we have, which is a little over 50% in the illiquids. So we've kind of achieved that. The GBP 3.5 billion of real assets gathered by AI have contributed to that. Obviously, that will be more than 50%. So some of that is then actually in a warehouse ready for deals that we do this year and a portion of that has been an element of back book activity as well. So that's roughly the mix there.

And we constantly look at what rebalancing we can do for the back book where as part of the overall ALM. But -- and the spreads, as I say, in corporate bonds has meant that we haven't allocated as much there. So we've still got a higher allocation of gilts.

On your second question, which was Retirement IFRS 17. Let me -- I might -- Yes. So look, I think what we've got in Retirement is historically, we've ended up with a little bit of new business, which is slightly unintuitive for the Retirement business because normally, when you write Retirement business, it all goes into the CSM. But in the last few years, we've ended up with a bit of benefit, and that's because the way it's allocated to the CSM is based on the target asset mix at the time and the pricing thereof.

If by the time we actually transact, it's slightly different and then that will drive a new business line. So this year, we haven't got that repeating, which is more likely what you would expect from IFRS 17. But in the past, we've ended up with a little bit of new business coming through.

In terms of assumption changes, I mean, they were honestly relatively benign. And then you've kind of got experience variance effects. We had more coming out of the CSM because we started with a bigger position. And then the investment return was a little bit lower, and that is because we use a 1-year rate to derive the expected return, and we saw a slightly bigger discount unwind from the higher opening CSM. So -- I mean, there's a few mixed pieces going up and down. But overall, that is a function of IFRS 17.

Tom?

Longevity. What was your question on longevity?

Was there have been any changes, any trends?

So on longevity, what I would say there is, we have moved to the latest tables. We have reflected essentially the CMI '24, moving from CMI '23 to '24 hasn't led to a big release or anything. We continue to apply a 0 weighting to '22 and '23. And that's -- instead of that, we apply a sort of temporary uplift for the mortality rates in the post-pandemic drivers. So things like the COVID and the NHS pressures.

As we kind of look forward, we retain -- so -- and we assume that will run off over a 10-year period, but we keep that under review. We then retain our long-term improvement rate, so we assume that, that continues to improve. So longevity still continues to improve, but the tapers sort of once people are in that 85-plus age bracket.

We generally have greater mortality improvements than we see in the general population. That's a function of our portfolio. And so there is -- we are assuming greater mortality improvements than the population more generally. And that will include, but not exclusively factors such as weight loss drugs and other sort of improvements in medical experience. So we are still having an assumption that longevity is improving.

Tom?

Thomas Bateman from Mediobanca. Just a question on Wealth. It's a bit of a fluffy question. But obviously, the GBP 280 million guidance for, I think it's, 2027 is really good in Wealth, quite a big jump from where we are. Could you just break us down? I think it's investment spend, but there's quite a big jump there. Is it just that?

And more generally, when you talk about Wealth, it always seems so fantastic, the win rate is really good. So how are you tracking versus that longer-term GBP 500 million guidance? I think it was 2030 or something.

And second question, again, on AI. I hear everything else you're saying on the group impact, but you haven't talked much about cost impact on AI. Is that something that we could expect to hear more from you in the long term in terms of cost savings?

And third question, just very quickly on the new lines of business at Probitas, what's the contribution from them?

Okay. I can pick up one and three, and Charlotte will pick up two. So on Wealth, on the GBP 280 million, so I think if we sort of go back to the in-focus session that Doug did 2 years ago now, we talked then about the getting to the GBP 280 million would be primarily driven by the two big lines of business, which would be -- which is the Workplace business and the Adviser Platform and that we would be investing in the Direct Wealth over the course -- the biggest investment was in 2024. Then there was more investment in 2025. And then that sort of -- that will drop out or become more normalized. I wouldn't say drop out, because you're always going to be investing in the business as we move forward.

So that's why we have -- so there is an investment drag, yes. And obviously, we've had some success in Direct Wealth. We've now got 100,000 customers. We've built the platform. We've put proposition onto that platform. And so we see some real traction in that business. So -- but I think we've always said that the benefit from Direct Wealth comes after this GBP 280 million ambition.

So are we confident about the continued growth of Wealth post the GBP 280 million? Absolutely. Because we can see that the Workplace engine continues to grow. I mean, I feel like I'm sort of boring you to death on this, but it is quite important, like Workplace contributions are today, that market is GBP 760 billion. It will be GBP 1.3 trillion by 2030. And I'm going to make a number of like GBP 2 trillion by 2035 or something like that, and I'm looking to the team to not to say that, that is the right number.

So as we have a close on 25% market share there, and we're retaining at a high level, and you've seen the benefits of the operating margin improvements, we've invested in the technology platform. Doug talked about that when he presented. So we're on modern technology. We're sort of built for this business to just keep growing and growing efficiently. And then you've got some of the tailwinds coming from the regulatory environment.

So yes, I'm super positive because it's a growing market. We are really good at it. We've got the sort of AI opportunity and 4.5 million current members, and we've just -- and we're winning schemes like the Mercer scheme. So I feel very good about that.

In terms of -- what was the second question?

Second question, AI and cost benefits, et cetera. I mean, I think it's very hard to put a specific cost benefit on this yet. Obviously, we -- when we are thinking about it, and what's already embedded in our numbers. So I think on one of my slides, I talked about as an annual BAU spending on growth, efficiency and customer change initiatives, we have about GBP 450 million. That's embedded in the business plans for the markets and the functions, and it's separate to the I&R spend that we have and regulatory-driven stuff. But it's a wide range of investment in our business. And that's a recurring amount that's been going on for a number of years.

And as each -- as part of the planning cycle, we work through how we're going to spend that money and some of the projects are multiyear. But you've heard us talk about things like the development of the app, the single source of the customer data, the work on Direct Wealth. That is all -- some of it is automation, some of it is AI. You've heard us talk about claims summarization, which takes call hold time down by 50%.

You've heard us talk about the large language models that we're developing that enables protection and underwriting to be done with automated reading of many doctors' notes. So all of that is driving productivity. And each time we spend money on those initiatives. There's a business case that's put forward that has benefits. And that's how we allocate all of the change money across the group. So this is no different.

And so to the extent that we've got those activities in flight and they're driving benefits to the business, they are part of the improvements that will drive us to those EPS targets. That's real, and that's built into all our numbers.

As we start talking about some of the more advanced things that are still an early stage, such as the Gen AI agent or the Agentic agents and where they will drive benefit, there are probably benefits beyond the planned time horizon. So they're not so incorporated in the targets that we have. But they are partly funded. And as the business cases build, we will start to think through how much of that annual budget is allocated in that direction. So I think it's very dynamic.

But what I'm trying to say is, yes, where it's real and tangible and we can put our arms around it, it's both funded and it's included in the benefits that are in the numbers that you can see, where it's more early stage and it's likely to leave benefits longer term, then it's outside of the target range. But people have talked around 15% to 20% of savings. And you can sort of begin to imagine how that might come. Now some of that will be in the work we do with outsources, because a lot of the -- a lot of the work that we have with outsources is the real mechanical stuff that we would look to automate and drive savings there. So some of it will come in the way we deal with those third parties as well. So it's a multiple range of things.

What I'm trying to do is give you assurance that it's normal course for us to be investing, have business cases, reflect those in the numbers and deliver.

On Probitas, so obviously, we are benefiting from the greater access to markets with the 8 lines of business. So illustratively, for 2025, we wrote about GBP 73 million worth of new business that neither Probitas on their own or Aviva's GCS would have written without previously. So I think we are showing progress. But here, I would say, again, it's about discipline in the current market environment. We've got those lines of business. We're not just going to write for the sake of top line. We will write profitable business.

Give it to Nasib and then Fahad.

Nasib Ahmed From UBS. So firstly, on capital management, I think pro forma, you're at 187% plus on the solvency. You're above the holding company cash of GBP 1 billion. And Charlotte, you were saying you're generating solvency above the dividend and the share buyback. And similarly on the cash remittances, if I roll that forward, you're generating more cash than you need. What is the binding constraint on distributable cash? Is it leverage where you're kind of around 30%?

Secondly, on bulk annuities, it seems like the second half last year was very competitive and probably getting more competitive with the transactions that are probably going to close this year. Why are you still in this market given your focus on capital light?

And then thirdly, on PYD first half versus second half, it seems like you've done some reserve strengthening in the second half, both in Canada and U.K. If you can talk a little bit about that.

Okay. I'll let Charlotte do one. I'll do two and she can do three.

Yes. So look, I think -- just trying to think how best to answer your question. I mean, look, we are talking around -- we're at 180%. Now I'm struggling with your number, 187%, what are you...

With Direct Line coming through 7 points.

I see. Okay. So the way I think you need to think about it is, we gave guidance for '27 of 20 points. I am going to get to your question, but let me just set the scene how I see it. So for 2027, I'm giving guidance of 20 points. And that comes from the sort of 12 points that we've had in the past, which is kind of like the 1 point a month of regular underlying OCG plus about 3 points coming from Direct Line. So we had about 1.5 points. This is just the regular performance of Direct Line. We had about 1.5 points in the latter part of the second half of the year.

So if I take the 12 points plus the 3 points that's coming from Direct Line, then I think of the business improvements, I'm getting to an underlying of about 17 points. And management actions on a recurring basis will be about 3 points. That gets me to the 20 points. So that's kind of '27. That's looking beyond when the Direct Line synergy benefits come through.

So at that point, dividends will probably be about 14 points and buybacks is about 4 points. So 20 versus 18 kind of gives me the couple of points of headroom.

'26 is a complicated year because you've kind of got a higher SCR going into the year. I would definitely expect that the underlying generation will continue to improve, but we will be focusing hugely on getting the 7 points of synergies coming out of Direct Line. And then kind of that will then drive the SCR down. But obviously, all the time, there's new business growth, which is driving the SCR up. So each year, the same number of points is leading to more pound notes in terms of capital generation.

When I think of just the near term, we've got dividends and buybacks to come out. So my 180% will go down. I've also got a bit of solvency, a bit of a few debt instruments or previously grandfathered instruments that stopping. So I've got some drags on capital coming from that. So I'm not sure I would give the pro forma, and I really don't want to give guidance for '26 because it's quite a complicated year. But what the 20 points looking through that to '27 is, I think, important for modeling. And it is a step-up from '25 when you think of -- obviously, we had extremely high levels of management actions, but that aside, it is a step-up on that.

On bulks, so first of all, I think your question was why do we do it? Well, we're actually quite good at it. So we've been doing it for a very long time. We are delivering results that are sort of mid-teens IRRs. So I think that's a pretty good return. It is a significant contributor to the cash and the dividend payment of the group. And what we've always said is that the role of bulks is to sort of stay like this, whilst the capital-light businesses go like this. But we've never said that bulks don't play an important role.

So we've got -- we're confident in the business. We've written GBP 4.6 billion of deals -- business across 86 deals. Yes, it's competitive, but our IRRs are attractive. We've got a really strong proposition called Clarity, which is the smaller deals, which we've sort of launched over the last couple of years. We've got a very experienced team.

And yes, there are new competitors in the market. But what you have to do when that happens is you have to sit back, you have to make sure that you are disciplined and you allow them to do what they will do. And it's not easy in this market from a regulatory perspective, making sure that you are disciplined to do this well. So we will watch how that plays out.

But we would still say that our GBP 15 billion to GBP 20 billion sort of guidance for 2025 to 2027 is there. The other thing I would say is that on individual annuities, which is part of this business, the sales are up 19%. And in our guided retirement proposition, which has got how do people draw down, how do they retire, that individual annuities plays a really important role as does equity release.

So I think you have to look at the combination effect of bulks of individual annuities and equity release. And I think that, yes, it will be competitive. And we will maintain discipline. I've said that about every line of business. And I think that's going to be the way that we will play this. We've got a scale position today, and we will make sure that we manage this business for profit.

And that's mine and Charlotte's role, and the team are all completely aligned with that.

On Canada?

So PYD, first half, second half reserving, I mean, we definitely had a positive impact on core from PYD. That's in the disclosures. And it was kind of actually across all the markets. I'm not going to go into the detail of reserving, but we had some larger losses, as I talked about before. We will reserve adequately for those. As we've looked through, again, best estimate reserving across the place, but there are -- there have been some areas that we've strengthened reserves here and there, but nothing major to call out.

I'm aware others are reporting this morning. So we'll take one last question from William Hawkins at the back, and then we'll take the other questions offline afterwards.

William from KBW. Hopefully, I'll be quick for the others. First of all, thank you for providing more financial information in Excel format. I know it's a really small point, but it is really helpful.

Two questions. It feels like ancient history, but can you just go back to the Life Insurance Stress Test and just tell us, did you learn anything that you thought was commercially helpful for your business or your understanding of the market?

And then secondly, a lot of talk today about the 94% combined ratio for 2026. What's your feeling about the long-term sustainability of underwriting margins? Is this a ratio that can keep improving because of the great stuff of AI and how you can keep growing the business because you've got amazing diversification? Or is this still a cyclical business? And so at some point, combined ratios have to be poorer. I'm not clear about sort of the long-term view on that.

Should I take Life Stress Test? So look, I think the Life Stress Test was, as you say, somewhat ancient history at this stage, but it was back in December -- or November, December when it was reported.

I think it did provided some helpful reassurance that the sector is well capitalized and can deal with reasonably severe stresses. And -- but it was done entity level, so it wasn't kind of group level. But nonetheless, the individual and the collective disclosure and the confirmation from the PRA that the framework is working well and they see the sector is resilient. I think was a net positive and partly because -- more specific than that, partly because we do a lot of stress and scenario tests anyway, we work through that. And for us, it is important how the group behaves overall. So neutral to helpful, I suppose.

And on the 94% COR, so I think we have to congratulate the U.K. team for getting to 93.9% in a very sort of competitive and dynamic environment. You asked, is insurance going to be still cyclical? My bet on this having done 35 years is, I think it probably is going to continue to be cyclical. I think the winners that come out of that cyclicality, if that's the right word, are those that are constantly looking at the cost and looking at the innovation within the business, making sure that you have pricing discipline that you're able to sort of flex according to the market.

The investment in AI and machine learning that we know that, that makes a massive difference to our ability to be able to price in a sophisticated way. But in a competitive environment, you're always going to be giving some of that back because your competitors, it's a bit like an arms race. You will invest in something, you will have a fraud tool or you're not getting rid of that fraudster. What you're doing is pushing that fraudster somewhere else. They'll keep trying, you have to keep going.

So I would say in the U.K. market, particularly as I think the most competitive market, I would say that we will be aiming for that 94%, which we've said, I think, for the last 4, 5 years, weather aside, that's where we're aiming. Obviously, we will constantly be looking to improve all of the time, but you also have to recognize cyclicality and the competitive nature of the market.

But I think we are set up to win because of our scale, because of our supply chain and because of all of the data that we have and the sophistication that we have within the business. And on that, I'm conscious that you have other places that you might need to get to.

So I just want to thank you very much for your questions. Obviously, we're around. If there are any follow-up questions, apologies that we couldn't get to absolutely everybody. But -- we have the brunch next Friday with Charlotte, which I'm sure you will deeply enjoy and you'll be able to ask her all the very detailed questions on appendices and everything else. So thank you very much.

Today, we are announcing that Aviva has delivered another outstanding set of results in 2025.

Group operating profit rose; IFRS return on equity increased; and capital and cash generation are growing. Our final dividend is up 10% year-on-year, and we are resuming the share buyback now at a higher level of GBP 350 million.

Every business contributed to these results. In General Insurance, premiums are up 18%. In Wealth, we are extending our #1 position with over GBP 230 billion of assets. In Retirement, both individual annuity and equity release sales were up double digits.

We have now achieved our Group 2026 targets a year early and have raised our ambitions with new targets. This is just the next step in our journey. There is more long-term potential beyond this 3-year horizon. And today, I will talk about 3 of these opportunities.

First, in General Insurance, there is plenty of room to grow, unlocking value from Direct Line, expanding partnerships, scaling SME in Canada and building our Lloyd's presence.

Secondly, in Wealth, where we have leading workplace and adviser platform businesses, and we are expanding fast: in advice with succession wealth; and scaling in direct wealth. We are on track for our GBP 280 million profit ambition in 2027. And Wealth will soon account for almost 10% of Group earnings.

And finally, artificial intelligence, where we have a greater opportunity than most with millions of customers, ability to deploy and reuse at scale, capacity to invest, and most importantly, proprietary customer and claims data, we are well positioned for this shift. We have developed AI capabilities, from claims summarization and call wrap, to medical underwriting. Our focus now is on bigger end-to-end opportunities where AI can transform areas like customer service, underwriting and operations.

So Aviva is in a stronger position than ever, and we are uniquely placed for longer-term success. We are the U.K.'s national champion and the only diversified insurer. We are accelerating capital-light. We have an outstanding customer franchise of more than 25 million customers globally and the U.K.'s most trusted insurance brand. We have proprietary data at scale, driving better customer outcomes.

All of this fuels our superior returns for shareholders, with strong and sustainable earnings growth and attractive dividend and regular share buyback. These strengths and many more give me deep confidence that we will unlock the full potential of Aviva in the years ahead.

Okay. Good morning, everyone, and thank you for joining us for this In Focus session. So today, we'll talk through our Q3 trading results, the progress on the Direct Line integration and also our new financial targets. So, there's a lot to cover.

I'll start with a high-level overview of each of these elements. Charlotte will then provide more detail on the financials. And finally, Jason and Owen will update you on the Direct Line integration, our progress to date, and why we're so excited for the future success of the Personal Lines business. And of course, we've left some time for the Q&A.

So, let me start with the key messages. First, we've delivered another strong set of results in Q3. This continued momentum across Aviva means that we are on track to meet our group 2026 financial targets at the end of 2025, a full year ahead of schedule. And to be clear, these 3-year targets will be achieved before any contribution from Direct Line. That is a huge testament to the strength of the underlying business.

Second, we are raising our expectations on the benefits that we will realize from the acquisition of Direct Line, increasing cost synergies to GBP 225 million and confirming significant capital benefits of at least GBP 500 million. The integration is already well underway. And while there is still more work to do, our early wins are very encouraging and have reinforced our belief in the full potential of this deal.

And finally, today, we are raising our ambitions for the group with new 3-year targets, which better reflect the scale of the opportunity we now have, our diversified capital-light business, and our confidence in delivery.

To put today's presentation into context, I want to take a moment to look back and reflect on just how far we've come. Over the last 5 years, we have transformed Aviva. We have put the business on a sustainable growth trajectory, stepping up for our customers and, of course, for our shareholders, returning over GBP 10 billion of capital and more than doubling the share price.

We are the U.K.'s leading diversified insurer, executing on our consistent strategy, extending our track record and powering growth organically and with M&A. We've achieved a huge amount. And at this point, I really want to thank the whole Aviva team, because all the progress made is down to their hard work.

And whilst this is the start of the next chapter for Aviva, our focus is unchanged. We will continue to accelerate capital-light growth, unlock our customer advantage and deliver on shareholder promises.

Now briefly touching on Q3. I'll share just a few highlights before Charlotte will cover the detail a little later. Quarter-on-quarter, we've been delivering strong profitable growth, and Q3 is no different. We are growing across the group from General Insurance in the U.K., Canada and Ireland, right through to our #1 wealth business, which now has over GBP 220 billion in assets. We're translating this top line growth into stronger earnings and returns.

For the full year, operating profit is tracking towards GBP 2.2 billion with growth well into the double digits. And we're set to deliver an IFRS return on equity of around 17%, which has almost doubled over the last 3 years. And there's no shortage of growth opportunities across the businesses, which gives us the confidence to continue raising our ambitions. As I've already said, we are set to achieve our 3-year targets a year early on a stand-alone basis, which is a fantastic achievement.

Let me give you the numbers here. We are set to exceed GBP 2 billion of operating profit and GBP 1.8 billion of own funds generation this year. And as you'd expect, we will meet our cash remittance target, which is cumulative in 2026.

I am really proud of Aviva's excellent performance, but obviously, we are not stopping here. There are so many opportunities for us to go after further and faster. So, let me talk you through three of them.

Firstly, the potential that we see in Direct Line; second, continuing to accelerate in capital-light; and third, our customer advantage.

So let's look at first, at the opportunity with Direct Line. With this deal, we have created the leader in U.K. Personal Lines. The strategic rationale was always compelling. It enables us to power capital-light growth and expand our customer base. And the financial benefits are just as attractive. In fact, there is even more potential than we first thought. And that's exactly why we're raising our ambitions here. We aim to deliver GBP 225 million in cost synergies, that is in addition to Direct Line's existing commitment for GBP 100 million in cost savings. And we are pleased to confirm at least GBP 500 million of capital benefits. All of this has allowed us to enhance shareholder distributions.

We are uplifting our dividend this year and expect to resume share buyback levels at a higher level when we report in March 2026. We are integrating Direct Line at speed, making real progress in only 4 months. We've put a single Personal Lines leadership team in place who have a strong technical and commercial grip on the business and trading performance. We haven't missed a beat for customers. And we are leveraging the power of our group model, transferring half of Direct Line's assets to Aviva Investors with more to come.

As you'd expect, we are focused on delivering early cost synergies. We are on track for GBP 40 million by the end of this year, a material step towards the GBP 225 million ambition. And work is well underway to unlock the capital benefits. So, it's been a great start. And Charlotte and I continue to lead the integration, ensuring that we carry this strong momentum through.

Now, let me turn to the second opportunity, capital-light. We continue to accelerate here. We are set to surpass 75% by the end of 2028 by growing faster in capital-light businesses and unlocking the synergies from Direct Line. This is a material shift from where we were just a few years ago. This is highly attractive for our shareholders, because it means that we are delivering stronger growth and better returns using less capital.

Of course, the complementary nature of our businesses remains a unique advantage of Aviva's diversified model. So we will continue to deliver disciplined growth in retirement, too, driving capital and cash generation and supporting our dividend.

The third opportunity we see is with our leading customer franchise. This is a key source of competitive advantage, which has only grown with the red line. We now have nearly 22 million customers in the U.K. alone, giving us one of the largest franchises in U.K. financial services. We are the standout insurer and bigger than most major banks. Over 7 million of our customers have multiple policies. We know the benefits of these customers. They are more engaged and they will stay with us for longer. The sheer scale of this franchise presents a growth opportunity that only Aviva can unlock.

We offer a full range of products to support customers throughout their lives. And now with this acquisition, we've added more products and capabilities such as Pet, Rescue and Micro-SME.

Over the last 5 years, we've invested heavily in digital and our technology from having all of our customer data in a single view right through to transforming engagement with artificial intelligence. And we will bring the full Aviva experience to our new Direct Line customers.

Now to bring all of this together, as you've heard, we are announcing new 3-year group targets today. These account for the acquisition of Direct Line and better reflect Aviva's trajectory as a diversified capital-light business. We have a new operating EPS target of 11% through to 2028. Linked to this and on an IFRS basis, we are aiming to deliver a return on equity of greater than 20% by 2028. And we're refreshing cash remittances now with bigger ambitions of over GBP 7 billion.

So, that's the high-level view. I'm now going to hand over to Charlotte, who will take you through the detail on the financials, including our thinking on the new target metrics.

Thanks, Amanda, and great to see you all today. I'm going to start by spending a few minutes covering the key points from our Q3 trading update before moving on to the detail about the new group targets and upgraded Direct Line synergies.

So, Q3 was another quarter of strong performance. Across our General Insurance businesses, premiums of GBP 10 billion were up 12%. This was strongly supported by 17% growth in U.K. and Ireland, reflecting the additions of Direct Line and Probitas as well as continued positive trading.

Canada grew by 3%, driven by pricing increases in Personal Lines, and this was despite some portfolio actions taken in Commercial Lines that I referred to at the half year. The group undiscounted COR was 94.4%, an improvement of 2.4 points, with the UK&I achieving 93.8% and Canada 95.4%. These strong results reflect the earn-through of our positive discipline on rate, some modest prior year development and better weather.

In IWR, the momentum of our Wealth business continues with net flows of GBP 8.3 billion, representing 6% of opening AUM once again. Performance remains strong, and we are on track to meet our ambition of GBP 280 million of operating profit in 2027.

Insurance sales were slightly lower year-on-year with double-digit growth in health more than offset by low volumes in protection. And as I said at the half year, this effect was expected as we consolidated the AIG and Aviva propositions in August of last year. We've seen good increases in new business margins as we've repriced in line with plans and continue with the integration.

In Retirement, sales of GBP 5.3 billion were lower following a particularly strong Q3 last year. Now the BPA market remains competitive, and we are pleased to have written GBP 3.9 billion of volumes across 63 deals by the end of Q3. And as of today, this has risen to GBP 4.5 billion, which we expect to be materially consistent for the full year. The pipeline remains healthy into next year. And as always, we remain disciplined, focused on writing business at strong IRRs.

And finally, turning to our balance sheet, which includes Direct Line for the first time. Our solvency ratio is 177%, in line with our previous guidance to be towards the top end of our 160% to 180% working range. And as a reminder, at this stage, the solvency position is before any of the expected capital synergies, which I'll come back to shortly.

Lastly, leverage is 31.4%, allowing for the Tier 2 debt instrument, which we recently announced will be redeemed in December at its first call date.

Now Amanda has already explained that we are on track to deliver our group targets a year early. This is a fantastic achievement that I shouldn't and won't walk past. We've seen exceptional performance over the past couple of years with growth in operating profits right across our diversified business. And this demonstrates the grip we have on performance management to actively manage our businesses through the cycle and outperform our peers.

And as you can see on this slide, with a few weeks remaining this year, we are forecasting a full year 2025 operating profit of approximately GBP 2.2 billion. This includes the 6 months of contribution from Direct Line of around GBP 150 million. We're also on track to hit our Solvency II own funds generation target of GBP 1.8 billion in 2025, also before any direct line contributions.

And the cash remittances target, which is a cumulative 3-year metric set at greater than GBP 5.8 billion between '24 and '26. We are comfortably ahead of schedule. By the half year, we'd already delivered GBP 3 billion in the 18 months since setting the target and anticipate to be around GBP 4 billion by the end of this year.

So given this excellent progress, now is the time to set out new 3-year targets, targets that reflect the shape of our group now and as we deliver our plans for the next 3 years to 2028.

These new targets are framed as ambitious developments in operating EPS, IFRS return on equity and cash remittances. And in defining and shaping these targets, we have considered market feedback on the measures that matter the most. They allow better comparability with peers and align with our capital management policy and strategic ambition to accelerate growth in capital-light business.

So, the first metric is defined as growth in operating EPS, and we are targeting an 11% CAGR from 2025 to 2028. We've selected this metric to capture both the operating earnings growth as well as the impact of share count reduction from sustainable capital returns.

So let me unpack where the 11% compounded growth is expected to come from. Firstly, we expect roughly 7 points of the growth to be driven by the power of the underlying business, including the turnaround of Direct Line. And as we continue to build on the track record of strong profitable growth across our diversified group.

Secondly, we are continuing to integrate Direct Line. The delivery of cost synergies will drive around 2 points of the growth.

And lastly, we intend to reintroduce regular and sustainable returns of capital in March 2026, which will add around 2 points through the reduction in share count. And as outlined earlier, we expect to deliver GBP 2.2 billion of operating profit for 2025 or an operating EPS of around 55p.

Now we will fix this as the baseline for measuring growth in operating EPS towards the 11% target over the next 3 years, with 2028 expected to be around 75p. And to help with your modeling, we've included a slide in the appendix with further information.

The second new target is IFRS return on equity, which we expect to be around 17% in 2025 and target greater than 20% by 2028. To achieve this target requires us to deliver strong returns and continue to shift towards capital light.

Now managing Aviva requires us to focus on both the IFRS and solvency views of the balance sheet, and our capital management framework is unchanged. Defining the target as IFRS return on equity recognizes that this measure is more widely used and understood by the market, increasing comparability. And we are well positioned to meet this target and drive attractive returns across the cycle. Again, more details in the appendix slides on the calculation basis for the IFRS ROE.

The last target to cover is cash remittances, where we are uplifting the target to deliver greater than GBP 7 billion between 2026 and '28. This represents a significant upgrade to our previous target and demonstrates the cash-generative power of our diversified business model. We have confidence in our capital management framework and the strength of our business to transform strong capital generation into cash remittances and ultimately, shareholder distributions.

Our track record evidence is this. It's also worth remembering that in addition to normal cash remittances, this year, we saw an additional remittances internally of GBP 1.4 billion to fund the Direct Line transaction. Of course, cash remittances underpin our dividends and return of capital to shareholders, which brings me to the next slide.

So as you remember, we increased the interim dividend, which represents about 1/3 of the annual dividend by 5% in line with our usual dividend policy and by a further 5% following completion of the Direct Line transaction. The approach in setting the final dividend is expected to be consistent with this, and we will -- and will be announced in March '26 alongside our full year results. And beyond that point, we will continue to grow the cash cost of the dividend by mid-single digits. in line with our dividend policy. And because we also intend to reintroduce regular share buybacks when we report in March '26, has an impact on DPS. In previous 3 years, the buybacks were GBP 300 million, and we expect to increase from this level to reflect the 14% increase in share count.

Now moving on to cost savings relating to Direct Line. Before I talk about the cost synergies relating to the transaction, I'm pleased to announce that Direct Line ambition of GBP 100 million of savings that was set out in July 2024 has now been completed.

Incremental to these savings we are increasing the cost synergies announced last December of GBP 125 million to GBP 225 million or about 35% of the Direct Line cost base. It reflects the opportunity to remove the meaningful overlap between the two Personal Line businesses. And Jason and Owen will shortly explain the progress on the integration, which is unlocking these synergies.

So expect about 45% of the savings to come from the removal of duplication at the head office level, 30% to come from automating, digitizing and rationalizing insurance operations and 25% to come from IT. And broadly, these savings are expected to be achieved evenly across the 3-year period. The cost to achieve these savings is estimated at GBP 350 million, a 40% increase from the original GBP 250 million compared with an 80% increase in the synergies. And overall, the ratio of cost to achieve to savings is expected to be around 1.5x.

At the same time, we are investing to bring the whole Personal Lines business up to a consistently high standard of customer experience and performance. And as an example of this, including continuing to transform the Direct Line claims process to align with Aviva's. This will bring considerable value in terms of claim costs and customer service, and we're investing around GBP 50 million to unlock this value as well.

Finally, an important driver of the Direct Line transactions comes from the capital synergies, which I'm pleased to announce are expected to be greater than GBP 500 million. The capital synergies arise because the capital required to be held for the Direct Line business is lower when it is part of the Aviva Group than was required when it was a stand-alone business. This arises from the diversification of risk when modeled on a combined basis with Aviva's U.K. General Insurance business as well as a further diversification when modeled with the Life and Canadian risks at the group level.

So, on the left-hand side of this slide, I thought it worth illustrating what these synergies represent in terms of the Direct Line solvency capital requirement or SCR. Since Direct Line reported its 2024 year-end balance sheet, the SCR has increased to GBP 1.4 billion from regular exposure and market developments and a temporary uplift from the forward view of net integration costs.

Measured in today's terms, we estimate these synergies would add at least 10 points of solvency benefit to the current 177%. Unlocking this capital synergy is a substantial piece of work, and our team is making great progress with approval expected around the end of 2026.

Now to help you with solvency ratio modeling ahead of this year-end, there are a few items worth flagging. We will see some further capital generation in the quarter with the usual guidance of around 1 point a month still suitable at the moment. We also expect to see further management actions in the fourth quarter, which means that total Solvency II management actions for this year will be above our normal guidance of around GBP 200 million. Offsetting this, we have recently announced that the GBP 900 million Tier 2 instrument will be redeemed at its first call date in December.

So, allowing for each of these factors, we expect the Solvency II position at full year '25 to be broadly consistent with the Q3 position of 177%, subject to market movements. And as mentioned before, we are comfortable operating towards the top end of our working range ahead of the realization of capital synergies around the end of '26.

So that's all I have to cover. But before I finish, I just want to reflect on the hard work that our team has done to get us here. Aviva has seen significant turnaround in recent years, and we now have real momentum. The opportunity with the Direct Line acquisition is significant, and we are laser-focused on the next phase of our growth, meeting our targets and delivering the Direct Line synergies. And for more on how we're going to unlock this opportunity, I'll hand over to Jason.

Thanks, Charlotte, and good morning, everyone. So it's been just over 4 months since the deal closed, and we are really looking forward to sharing some more details with you today. But just before we get into that, I'd like to start with some context on the role that U.K. and Ireland's General Insurance plays for Aviva.

On a stand-alone basis, we already contribute more than 1/3 of the group's operating profit. Actually, we've more than doubled our profit contribution over the last 3 years. So U.K. and Ireland General Insurance is a key driver in Aviva's shift towards capital light. We're already a market leader in Commercial Lines, and now we're also a leader in Personal Lines. We continue to get great feedback from our customers and brokers across the portfolio with Ireland and the Global Corporate and Specialty business give us the benefit of geographic diversification.

And finally, I should just mention that we've been accelerating our GCS business with the acquisition of Probitas last year. Since completing that deal and as a result of launching 7 new lines of business in Lloyd's, fantastic broker support and a number of large client wins, we're already ahead of our plan on revenue synergies. And on the people front, we've now completed the process to transfer Probitas employees over to Aviva, and we've announced new leadership.

Now looking at the Personal Lines business, which already accounts for around half of our profit and premiums. As you can see, the team has an impressive track record, which is why we're so confident in the turnaround that we can deliver with Direct Line. The underlying Aviva business has seen strong growth in premiums well into the double digits. And it's not just pricing. Since 2022, we've added 2.5 million policies in force, and we now serve nearly 7 million customers.

We've always been highly disciplined in underwriting, and it's paying off with our combined ratio below 94% because of our relentless focus on effective distribution, managing claims well and keeping our costs down. And we've done all of this through various market conditions, which has allowed us to keep investing in the business. And that's why Aviva's Personal Lines is in such a great position today.

Now with Direct Line, we'll have over GBP 7 billion in combined premiums and we're the clear #1 in the market with unmatched scale. And in Personal Lines, operational scale is hugely important, because it means we can benefit from lower cost to serve, greater capacity to invest and game-changing amounts of data. Together with Aviva's technical excellence and pricing sophistication, this is an incredibly powerful combination and one that will extend our competitive advantage and help us to navigate the market cycle even more effectively. But it's not just about efficiency gains. Our leading brands, product offerings and large customer base create fantastic optionality in terms of how and where we can grow this business. And as Amanda said, there's even more potential at Direct Line than we first thought. So, we know there's an awful lot more to come from this business.

Now moving to the integration. This is a group-wide program with clear accountabilities across Aviva's ExCo, robust governance in place as well as dedicated resource and integration expertise.

Our integration program has been up and running since January, which is a full 6 months before we'd even completed the deal. And so it's this preparation that helped us to move so quickly as soon as we got the keys, not only from a customer, operational and regulatory lens, but also rapidly embedding Aviva's leadership and welcoming our new Direct Line colleagues. So, we are in a really strong position, and we're very focused on delivering our ultimate objectives.

We're acting on every opportunity to transform Direct Line's performance. It's clear that the business had benefited from the harder rate environment in 2024, and we saw this in the Direct Line profitability at the half year. However, written margins in the first half of '25 were not yet at the levels that we would be satisfied with at Aviva. So, while they have been taking some action, we have significantly accelerated the turnaround. I just think that we're moving faster, making better decisions, and we have more at our disposal. We now have a single leadership team in Personal Lines led by Owen.

And beyond the immediate people changes, we've taken swift action across a number of areas. We've brought together our data set to enhance pricing across the book. We've deployed new and more advanced models. We've broadened our underwriting footprint, and we've completed the rollout of Direct Line onto all 4 PCWs. And since the beginning of July, we've already unlocked early benefits, improving Direct Line's written combined ratio on motor by 4 points. And as you'd expect, we will see further impact as our actions continue to earn through over time.

And we're moving just as quickly on cost synergies. We're rightsizing the business to remove over 300 duplicate roles this year, including the leadership transition on day 1. And we're optimizing our supply chain. We've streamlined more than 70 of Direct Lines' non-claims suppliers with over 200 currently under review. And around 60% of our claims supply chain spend is already shared. So, we're focused on harmonizing the rates we pay there. As a result, we are well on track to deliver around GBP 40 million of synergies by the end of this year. And all of that was achieved in the last 4 months alone. So, we're really confident about how much more we can do over time.

Now moving to our integration plan, which is focused on four key areas. I'll say a few more words about leadership and organization and the opportunity we have across customer and integrating operations before handing over to Owen, who will talk you through how we are approaching commercial and brands. Obviously, to make this a success, we need the right people. So, we announced our Personal Lines leadership team in September. And this is aligned to Aviva's channel-focused model with the benefit of sharing functions across GI and the group.

Year after year, we have already proven that this is a winning formula. And why am I so confident that this is the right team? Because it's the same team that has driven the impressive transformation of our Personal Lines business over the last 4 years. They've successfully navigated challenging market conditions and delivered strong profitable growth right through COVID, periods of high inflation and the introduction of pricing practices where many others struggled. They've transformed our claims journeys and repair capabilities through Solus with a material uplift to Net Promoter Scores and claims cost savings. And they successfully put the Aviva brand on PCWs, shifting our distribution to majority retail. So, for these reasons and many, many more, I know that this is the right team to invest behind.

Turning now to the customer opportunity. This acquisition means that we've now got over 12 million of them. So, we're working really closely with Charlotte and her team on three key areas.

The first is on retention and growth. 2/3 of Direct Line's 6 million customers are new to Aviva. So, our immediate priority is to keep them at renewal.

Second, we want to serve more customer needs. Aviva is well ahead of the curve here. So, we're going to offer our broader product range to Direct Line customers.

And third, we'll transform their digital experience, because we see real value in driving self-serve and digital adoption at Direct Line.

And we're also consolidating all the data into our single customer view. This makes a huge difference in delivering the best possible experience, because we can see all of their interactions across all of our products. And our MyAviva App is critical here, and we expect the first Direct Line customers to be able to view their policies on our app by the end of next year, bringing the full Aviva experience to millions more.

Next, on claims, where we now have unmatched scale with GBP 4 billion in combined spend. And with that scale comes powerful advantages. As I said earlier, we're optimizing our supply chain. We're deploying artificial intelligence more widely like our claims summarization tool, which is already used by over 500 Aviva handlers and is half the time that our customers are on hold. We're further strengthening our data sets and feedback loops. For instance, we're already sharing critical information like fraud insights and supplier cost trends with the pricing and underwriting teams. And we're capitalizing on our owned repair network, which is the only one in the U.K.

Solus is already very high performing, saving us around GBP 500 per repair and halving the time it takes. And we're bringing Aviva's best practice to the Direct Line network. Finally, we're moving to a single claims operation built on Aviva's proven model with a relentless focus on end-to-end outcomes. We've already successfully reengineered our motor claims journeys, delivering top-tier experience and unlocking over GBP 85 million of claims cost savings. And we're expecting to deliver at least GBP 50 million of savings in Direct Line.

Finally, let me just touch on technology. We're starting from a really good place, because we already have fit-for-purpose technology. Our platforms are compatible with one another, and we have many common applications, especially in the critical areas like pricing and data. So, our focus now is to simplify the tech estate in a pragmatic way. We will be moving Direct Line on to Aviva's systems, which we've already modernized over recent years.

And we've already firmed up plans to accelerate cloud adoption and close two on-site data centers as well as to move on to a single claim system. And as in all other areas, we'll be aligning Direct Line to Aviva's operating model. So there's lots more to do. And I'm really excited about all the possibilities for this business and what we can build on over the next few years.

So with that, I'll now pass to Owen to share some more detail on the opportunity in Commercial and brands.

Thank you, Jason, and good morning, everyone. As you've heard, the acquisition of Direct Line will significantly expand the opportunity we have in U.K. Personal Lines. The market accounts for over GBP 35 billion in premium. That's a big opportunity, and it's a highly profitable one for players who are consistent and disciplined through the cycle. And year-on-year, we've proven that we can do that.

Now the shape of our combined business is a key strength. We're the #1 player in motor and home. And importantly, we're not over reliant on any specific product. From a distribution lens, we're more weighted towards retail, which is attractive, because we directly own the customer relationship and it's more profitable. And as Jason said, with Direct Line, we now have the critical benefit of scale well beyond our peers. That will enable us to navigate market conditions and trends even more effectively.

We can drive cost efficiencies, invest more in technical capabilities and brand and ultimately continue to outperform in what is a competitive environment. We also have the unique advantage of a complementary and diversified portfolio, covering the full breadth of the market.

Let me unpack that for you, starting with retail. Our direct book serves customers who come straight to Aviva. They expect a rich product, full service and are more likely to hold multiple products. PCW is the largest and fastest-growing channel in the market and is an important driver of customer and profit growth. And we also have the new direct line products across Pet, Rescue and Micro-SME. We have real growth headroom here, which I'll cover later.

The intermediated side of the business plays an equally important role. We are historically strong in this space with leading broker and distribution relationships, both within GI and across the group.

Aviva Private Clients is our leading high net worth proposition for mid through to ultra-high net worth clients. Our broker business further expands our customer reach, often serving customers who need advice for their insurance requirements.

Finally, partnerships serve customers of leading U.K. banks as well as other key partners, harnessing their brand and reach. So, each segment plays an important role. And we have leading market positions across the board, giving us the right to win today and in the future.

So, when it comes to our retail channels, our brands are crucial to enabling both customer choice and unlocking commercial success. Aviva already operates a multi-brand strategy on PCWs, so we know exactly how to manage this. And we've done so with great success, nearly tripling policies over the last 5 years and maintaining a strong retention rate throughout.

Aviva Zero is a great example of this in action. We launched the brand in early 2022. And since then, we've grown to almost 1 million policies in force. Over the same period, we've added a similar number of policies to Aviva Online as well. And we've seen very low levels of switching between the two. In other words, any overlap is significantly outweighed by the benefits of choice for customers and incremental profitable growth to us. And with Direct Line, we now have an even broader set of brands, which grows our advantage. Not only are we extending customer reach, but we're also increasing presence on PCWs, both of which drive stronger commercial outcomes. And we've provided customers more choice and flexibility as their needs change from lower cost cover through QuoteMeHappy and Churchill right through to more affluent customers with Aviva Signature, our premium direct proposition and everything in between.

Of course, deploying these brands in the right way is critical. We're clear on our target customer segments for each, differentiated across important factors like affluence and age right through to lifestyle. And we also know how each brand resonates differently. This allows us to minimize overlap while giving customers freedom of choice. So collectively, all our brands form a powerful customer engine, which is unique to Aviva.

One area I'd like to cover in more detail is the Direct Line brand on PCWs. This is a huge growth opportunity, and we're accelerating progress. After more than 12 months, Direct Line was still on just 1 PCW. And in the last 90 days, we've helped the teams get live on all four major names. As Jason said earlier, we're also transforming Direct Line PCW performance with Aviva's technical capabilities. There's a long list, so I'll just pick out a few highlights.

We've rolled out more sophisticated risk models, including bodily injury, and we've increased the frequency of pricing changes by more than 50% since June. We've streamlined processes to accelerate the pace and quality of decision-making across trading and performance management. We've increased quotability through an expansion to underwriting footprint. We've shared data sets across the two businesses and put efficient feedback loops in place, and we now have more claims data than anyone else in the market.

And finally, we're following Aviva's pricing and underwriting-led approach to embed margin discipline across the book. This is our DNA and has served us well through many different market conditions. Our primary focus has been on margins, and we're already starting to improve loss ratios. We're also seeing the earliest green shoots of momentum on volume with the policy count for Direct Line PCW more than double where it was at the half year, but our focus will always be on margin first. And we've done this before with a clear track record of building and rapidly scaling on PCWs with Aviva Online and Aviva Zero. So, I know that we're bringing all the right capabilities to deliver the same success to Direct Line.

As well as enhancing existing lines, we also have attractive opportunities with new products. As you can see, market shares are low relative to the rest of our portfolio. So we're confident that with targeted and careful investment, we have real potential to unlock more growth.

In Rescue, we want to accelerate by capitalizing on opportunities across our value chain, including our own distribution, partnership capabilities and claims. In Pet, we're intending to build a new Aviva branded product to capitalize on the PCW opportunity and tap into Aviva's existing customer base, including through MyAviva.

Micro-SME primarily covers vans and small-scale residential landlords, which already formed part of our Personal Lines business. This has always been complementary to our Commercial Lines business, which serves SMEs and corporate customers via brokers, and we can use our expertise to accelerate here.

Finally, on Motability, where we provide fleet cover for the scheme that leases vehicles to people with disabilities or long-term health conditions. We are already bringing strong capabilities to deliver on our joint partnership priorities. And while others have struggled to succeed in partnerships, that has not been the case for us. In fact, we've consistently written at attractive combined ratios in our Partnerships business.

To wrap up, together with Direct Line, we now have even stronger competitive advantages, setting us well apart and enabling us to be the standout #1 player in the U.K. We have leading positions, a strong track record, well-known brands, a full suite of products and first-class technical capabilities in pricing, underwriting and claims. These strengths will set us up to win both now and for the longer term. And with our unparalleled scale, we'll keep investing to unlock even more potential. So, I'm excited for the future of our Personal Lines business and what we can achieve.

And with that, I'll hand back to you, Amanda.

Okay. Thanks, Owen, Jason and Charlotte. So, before we move on to Q&A, let me share some final reflections on what you've heard today. So as you can see, Aviva is in a stronger position than ever. Our performance trajectory continues with another set of targets achieved. We are well on track to unlock the huge potential with Direct Line. And our new 3-year targets reflect our big growth ambitions. And we know there's still much more to come from Aviva. In fact, we believe the investment case is now even more compelling.

We are the U.K.'s leading diversified insurer with market-leading positions across the board. We are majority capital-light today, and we are set to surpass 75% by the end of 2028. We are executing a clear customer-first strategy now for even more customers. And we've got momentum. We're building on it quarter after quarter. We're delivering for our shareholders with enhanced distributions. And as a management team, we are confident about Aviva's future.

So thank you, everyone, particularly to Owen and Jason. Now Charlotte and I will move on to do the Q&A. Thank you very much.

Thank you. And just as a reminder, if you want to ask a question, just raise a hand and give us a moment to get a microphone to you start with Andy Sinclair in the third row.

Nice targets. So first, on the GBP 50 million of claims cost savings within Direct Line, can you just tell us a little bit more about what's included in that? What scope there is to go further on effectively improving the loss ratio and claims management within DLG?

Second, just on Direct Lines reserves when they came in, just any color you can give us in terms of any adjustments made to the Direct Line reserves when they were brought into Aviva, effectively as Direct Lines old business now reserved to the same standard, same levels as the Aviva business?

And just finally, on the capital synergies, just how much of that is from just diversification versus how much effectively assumption changes from the cost saves coming through releasing any excess capital on Direct Line or anything along those lines? Just some detail on where that comes from.

Okay. Should I pick up one and you pick up two or three, Charlotte?

Yes.

Yes. Okay. So on the claims, as Owen and Jason outlined, there's a huge opportunity there. We've got a combined indemnity spend of GBP 4 billion. And if you think about the garage network as well, and the savings that Jason was articulating there of GBP 500 when we use the Solus garage. And so where -- what that GBP 50 million will be, and we've demonstrated it in the core Aviva book. We've taken out the sort of GBP 85 million. Remember, that's a sort of recurring GBP 85 million once we've done the investment. So, what we're doing is investing GBP 50 million to deliver a GBP 50 million recurring savings, which you'll see coming through in the loss ratio.

So, it can be better fraud models. It can be better efficiency improvements. It can be -- all the sort of things you would expect, the process of handling the claims so that we're not losing any money in the way that the claim is paid. I mean, it's -- I think it's a really good number. And you'll see that on top of all the other benefits that Owen talked about in terms of the pricing and underwriting.

And that loop of claims to underwriting, if I think back to the inflation challenge that we had, it was the processes that we had in place that we'd invested in, which created the loop of information. I think that's what you're going to see here in Direct Lines. So hopefully, that's a little bit more flavor. Charlotte?

So on reserves, look, as we mentioned at the half year, we didn't observe any issues with Direct Lines reserving. And obviously, we paid the first uplift on the dividend at that point, which should have given you also some comfort in that. Of course, one of the integration activities is to bring alignment with Aviva's accounting and reserving policies. And that's part of determining the acquisition balance sheet.

I would say on that, the work is still ongoing, but we're well progressed across the material components and in particular, on reserving. So, all of that work on reserve policy alignment is substantially complete. And to the extent that we have made any adjustments, they are reflected in the Q3 solvency ratio of 177%. And you'll see the details on the full acquisition balance sheet when we publish it at the full year-end. And then, on capital synergies, I mean, essentially, the GBP 500 million is all coming from diversification.

Andrew Baker just behind.

It's Andrew Baker with Goldman Sachs. So first one, on Slide 17, so the 7% sort of growth in the underlying business. If we strip out Direct Line from that, I'm guessing the underlying growth, sort of, at the remaining businesses are probably in the mid-single-digit range. Are you able to give us a sense of which businesses you're expecting to, sort of, outgrow that number, which businesses are a drag on that number? Just sort of trying to get a sense of the pluses and minuses around that mid-single-digit number?

And then secondly, just in terms of the plan, are you able to give us a sense of the P&C top line and combined ratio assumptions that are within your planning assumptions? Again, just trying to get a sense of the conservatism or not within your plan, especially given your track record of beating targets historically.

Do you want to pick up the first and I'll pick up the second.

Yes. So, I think, what I would say is, we're very, very pleased with the EPS development that we can see here, so the 11%. And as I unpacked before, it's 2% coming from the share count improvement -- share count movement from the buybacks, 2% from the cost synergies. I think, when we look at the rest, it is a strong track record across all of the business, and it's our opportunity to manage the group as a whole. Some of it is more top line driven.

So Health and Wealth, some of it is more margin improvement, which we would point to Direct Line and some of the other General Insurance businesses. I'm not going to unpack it because part of the beauty of the diversified business is being able to take advantage of tailwinds and not bang our head against headwinds. But I think what you see is us is driving really high-quality growth across those businesses. And it's already coming off a very strong track record of improvement in profitability as well. So, I think we always take the right decisions on the portfolio to really keep within the risk parameters that we've set.

Yes. And on the assumptions. So, to just reiterate what Charlotte said, we think the targets are ambitious. And we also think that the 11% CAGR is very attractive, and hopefully, people agree with that. In terms of the assumptions, we've been realistic here. So, we've taken into account the soft market in parts of General Insurance, GCS, and we've also the difference between the U.K. and Canadian markets. So you've got a hard Personal Lines market in Canada, where rates are going up in motor and home by around 11%.

And also the fact that we've got a leading position in the SME market in the U.K. and where we're seeing good rate and increase still coming through on that business. So, we've taken all of that into account. Also, the -- we've set the trajectory based on the spreads and the yield curves as we see them today.

And obviously, we've also got some real positives. If you think about the tailwinds that there are in Workplace and Wealth and Health, then that, I think, is also important to remember. If we think about just a little bit on Workplace, GBP 1 billion of regular contributions inflows coming through every month. it is a train that sort of keeps on growing. Greg and the team have got a fantastic proposition. They're winning over 75% of deals. So there, you're seeing a sort of volume and the sort of margin improvement. So, I think we feel that the assumptions are realistic, but ambitious.

Farooq in the front.

Farooq Hanif from JPMorgan. The first question, adding to that, a lot of your peers have talked about the scale opportunity in Workplace and Wealth, the operating leverage. So I mean, obviously, you're seeing that in your GBP 280 million target. But can we assume that if that accelerates like your peers, you expect operating leverage to continue? So you add a lot of assets without much cost basically in that business going forward? Because obviously, your target for '26, you've got another 2 years. So it'd be interesting to know about the momentum in that business.

Second question is on the customer opportunity. I mean, you talked about it, I think, very convincingly, you've obviously delivered it in the past. But just in terms of the Direct Line customer base, can you throw out some numbers again in the context of what you said before about what the opportunity is there?

And the last question is, please don't laugh, but M&A again. So I mean, by my calculations, you've got pretty good buildup of cash again. The 10 points of synergies is very, very helpful. It feels like that by 2028, you're back to where you were before you did the DLG deal. Has anything changed in terms of M&A? Is it still something that you will look at, if you see something appropriate or do you think it's kind of done?

Okay. So I'll get Charlotte to talk about the operating leverage, because she's got some numbers. But just a little bit on the scale in Wealth. I mean, we have scale in Wealth. We are the biggest platform in Wealth to over GBP 220 billion. And what's really important, I think, is if you look at the component parts of that, the Workplace business and the Platform business are profitable businesses today.

And so, we get good margins on those businesses. And obviously, scale allows us to benefit from that. And it also allows us to invest in both of those things, and there'll be a new MyWorkplace App, which will be launched. I think, I'm looking at the team this week, they are assuming soon, soon, which will enhance the proposition sort of even further. So very, very excited about that. Charlotte, in terms of the margin.

Yes. I mean, the margins that we've thrown out before, and I think all the way back to the In Focus session, we talked about a revenue margin of around 30 bps and an operating margin of around 10 bps. I think, where we were at the half year, we were still around that 30 points, but there's always pressure on that revenue margin. And therefore, it's really important to be driving the operating leverage. So, I think by the half year, actually, we were showing something more like 12 points. So, that is everything that we recognize in the IWR business. And it's kind of a material driver of that profit in Wealth.

And as we continue to build the scale and focus on the costs and how we deliver, then we will kind of keep ahead on the operating margin. And then, of course, on top of all of that, you've got then a lot of the flows, now a really high proportion of the flows going into Aviva Investors. And then there's a small fund management fee that appears on the Aviva Investors side as well.

Now on the customer, there's a lot of customer data. So, I mean, I could go on for most of the session on this, but I'll just maybe give you some of the headlines.

So, 22 million customers in the U.K. alone. So one of the largest franchises, we've talked about that. So, 4 in 10 adults in the U.K. have got a policy with us. If we exclude the acquisition of Direct Line, we have grown our customer base by 2 million over the last 5 years and our multiproduct holdings are up from 4.7 million to 5.48 million to be precise, since 2022.

Some of the key things here, 43% of our new sales come from existing customers over the last year alone, and we've grown the marketable customers by 5%. Now then add on the opportunity with Direct Line that comes with that. Obviously, Jason referred to 4 million new customers and then the opportunity to overlay, the opportunity to sell more Aviva products, I mean, I think that's incredibly exciting. But we've also been able to drive a huge improvement in customer experience. So, our TNPS is now consistently over 50, and our online experience score is over 70%.

And we spoke about the digitization and automation within Direct Line. If we compare Aviva and Direct Line in terms of that customer experience, a lot of the Direct Line demand is still over the phone. It's not digital, it's not automated. So that's cost heavy, if you like.

We've made a real big success of automating and digitizing our customer journeys over the last number of years. So, you imagine bringing that, that delivers a better customer experience. So, I think the opportunities are really high, and we're very excited about getting on and delivering that. Really key to that, though, without wishing to elaborate too much, is having the strategic customer marketing space where we've got all a single view of customers. Also, for many years, insurers have talked about or everybody talks about having a single view of the customer. We obviously have that. And that is incredibly important of being able to deliver this growth. And that is right across Aviva, not just in General Insurance.

On M&A, yes, we do build back up the cash. And what we've always said about the capital allocation is, we either return it to shareholders or we invest it well in the business. And look, when we think about the business, we've got big integration to do. We've made great progress, yes, but we're 4 months in. We've got to deliver the capital synergies all of next year. We've got to deliver all of the other cost synergies. But please be reassured, we're very ambitious for this business. But we do believe there's plenty of organic growth opportunities that we've already talked about just some of them today. Remember, this is only like a Q3 trading update, but I know it feels like a lot more than that. But there's plenty -- there's going to be plenty of opportunities.

Come to Dom in the second row.

Dom O'Mahony, BNP Paribas. Can I just start with, Charlotte, on capital generation, you very helpfully said we should continue to think about 1 point a month. But then you said for now, and I wanted to ask you some. My guess is that number has to go up given the ROE uplift and given that you've -- you're integrating Direct Line, you have the synergies to come. What do you think the run rate capital generation is in percentage points?

Second question is, if you think about the synergies all in, you've got GBP 275 million (sic) [ GBP 225 million ] on the slide now, given the cost and the claims. How much of that do you anticipate reinvesting into growth, into pricing, into making sure you're as competitive as possible?

And then the third question is just on the assumptions embedded in the plan. I realize you want to keep a bit of the flexibility, but just two specifics within that. Reinsurance, so are you assuming that the quota share at under or at -- line lapses? Are you assuming any change to excess of loss? And in particular, what are you thinking about the intangibles? Are those being written off? What does that mean for the amortization going through the operating lines? Sorry, I've probably taken more questions than 3 there, but...

It's about 5, I think, but that's okay.

Yes. So, I suppose a couple of things to think about. So on the capital synergies, GBP 500 million, that equates to 10 points of solvency. So that's kind of a stock build, if you like, and that sort of takes the 177% to 187% if we were to do it all now. There's obviously quite a few moving parts. So that's why we were trying to also get you to the full year-end and thinking through that with the higher level of management actions.

If I do go further forward, there will be other bits and pieces that will move before all of that kind of realization of synergies. But from the end of '26, we should have brought the stock of solvency well above the working range again. And kind of once that's done, we would expect -- and therefore, the SCR is reduced, we would expect about 20 percentage points of OCG per year kind of -- and going up from there. So, if you go back to '24, that was more like 15. So that's taking into account the regular and then a sort of monthly and then a sort of usual amount of management actions around the GBP 200 million point.

So, I think we would expect that the capital that we generate will more than cover the uses of capital for dividends and buybacks, et cetera. Obviously, there's market movements and other things to factor in, and we will redo -- we'll give you more up-to-date sensitivities when we publish at the year-end. So hopefully, that answers that.

And on the synergies, so GBP 225 million is the cost synergies and the claims are not included in that. So the GBP 225 is the operating cost number so that you can kind of measure against the '24 baseline. It also doesn't include any accounting stuff. So to the extent that we have, and that was sort of your -- one of your other questions, we've written off about 80% of their intangibles as part of the acquisition balance sheet, that clearly reduces the amortization coming through. However, part of the policy alignment is then look at the level of capitalization of change spend and they were capitalizing a lot, we will capitalize a lot less there.

So, we've kind of given a number of about GBP 50 million on a full year basis for those kind of netting effects. That is not in the GBP 225 million though. That's obviously in the EPS build, but it's not in the GBP 225 million, which is just an operating cost view.

So does that -- to the extent that we're then looking to reinvest that and build that, that, I think, is kind of part of the normal business planning process. On assumptions, the reinsurance quota share that they had, we don't intend to renew. So, that's already because of the forward-looking view of the way solvency works, that's already factored into the 177%. So that's kind of that sort of driving a little bit of the SCR development. Is that it? Is that all 6?

If we go to Larissa.

I'll stick to three. You had a very interesting slide about the peripheral, so basically non-home and motor opportunities that you see in the U.K. Could you give us a sense of which ones you believe have the most growth potential near term and how fast we can expect that ramp-up to be?

While we're on peripheral product lines, Canada had a very good third quarter with no nat cats. But are there any gaps in the product lines that you see there that you would consider filling either and also geographic lines to diversify the exposure there? And would you have a preference for organic or acquisitive?

And then the last one, following up on Dom's question about the 1 percentage point, which was the first question I was going to ask. But you mentioned, as previously guided on the 160% to 180% on the Solvency II target. How should we think about that potentially changing when the Part VII comes through and also when all of the synergies roll through to -- and management actions by the time that we hit 2028?

Okay. Thanks. I'll pick up the first two and Charlotte will try to pick up third one. So, I think we see -- we're not going to choose the favorite child. We think that there are growth opportunities both -- well, in all three areas of Green Flag, the Pet and the Micro-SME.

The team will know that I've always been a big fan of Micro-SME, and it's not something that we really had in our toolkit. And so, -- and Direct Line have that and be a really good proposition on landlord and on van. And so, we believe that with the really big -- our customer base, the opportunity that we have, MyAviva, et cetera, that there's a really big opportunity there as people choose to self-serve more, particularly in that Micro-SME range. And there's a lot of small entrepreneurs in the U.K. that have to buy things like D&O, financial lines products, newer contracts and controls and things like that. So, we think that there's a good opportunity there, and we can bring some real technical expertise to that.

I mean, in Green Flag, there's 7% market share and with leading market sentiment. I think there's a Trustpilot score of 4.6 on the Green Flag. So, we think that there's a real opportunity, again, here for us to leverage our digital capabilities, but also the integration of that into our claims line and also into Solus. So we think that there, it's a great business. So, we think there's a good opportunity.

And then on Pet, so the Pet market is GBP 1.9 billion in 2024, set to grow by GBP 2.3 billion by 2030. So these are all the animals that people bought during COVID and things like that. So there's a big opportunity there.

And Direct Line have been offering Pets for 30 years, and the business has actually performed well. So strong foundations upon which to build. And I think, again, we talked about launching an Aviva product.

With the Aviva brand, our 22 million customers and again, the digital capabilities on things like MyAviva, we think that there's a real opportunity. So really, really good opportunities there. On Canada, yes, so Canada have had a really good performance improvement from last year. Obviously, there were a lot of cat events last year. But they've also seen a really strong turnaround in terms of their Personal Lines business, carrying good rate. They've dealt with the sort of theft issues that there were a number of years ago, and I think they've done that well. Obviously, we do have more business in Ontario than the sort of some of our competitors. So, looking to expand in areas like Quebec, that's certainly something that we're thinking about.

In terms of product lines, it's not so much a product lines point, but we've got two really big partnerships, one with RBC and a new partnership with President's Choice. So President's Choice has got about 17 million customers in Canada, and we've got that sort of sole tie arrangement with them.

So, there is a real opportunity for NAV and the team to grow that. And there is an existing book of business as well, which is transferring over, and we're already sort of well into doing that. So the Canadian team are really excited about that. So yes, there's opportunity for geographic diversification. But we've also invested in things like our models on exposure management, cat and that sort of thing. So I think the underlying performance should also improve. So yes, we're excited about what Canada is going to do.

So the short answer on the 160% to 180% range is, is we're still perfectly happy with it and expect to be when the -- all the capital synergies are realized as well. I mean, I think in your question, maybe it's just worth kind of going through some of that -- those things that I answered to Dom earlier again.

We do expect, well until those capital synergies come through, got a higher SCR, so the kind of the 1 point a month, 3 points a quarter for regular is about right. And then you've kind of got the effect of the management actions, which this year are a bit more elevated, but we would always guide to around the 200%.

So, kind of once that's complete, it's going to lift in terms of the regular to more like 4 a quarter, so bringing it to 20 in the round for the year. But in practice, it's obviously lumpy quarter-to-quarter depending on things like the amount of BPA we write, what the strain is, the assets we've originated and obviously, seasonality in GI. So, we will -- as I say, the 160%, 180% has been the range for a long time, and we're perfectly happy with it, and we'll be on the other side, too.

We go to Andrew, then Mandeep, and Tom.

It's Andrew Crean for Autonomous. A couple of questions. Firstly, when you first announced the Direct Line deal, I think you talked about 10% underlying EPS uplift. Could you give your sense of what that is now with the bigger cost savings? Because if I take a look at your 11% compound growth in EPS, just if I was to take Direct Line out, what would that be?

And then the second thing is you -- I noticed you said that the ROE on your General Insurance business is 31%, which is higher than the 20%. Given market conditions, and you sort of flagged soft market conditions in both U.K. retail and in commercial, what are you expecting the combined ratio to do across your books over the period to 2028?

Okay. Charlotte, do you want to take?

Yes. So look, on the first one, we're really focused on the integration and development of the Direct Line business within Personal Lines and therefore, part of the U.K. GI business. And so we're kind of building all of the benefits from integrating Direct Line into the plans that drive towards these new ambitious targets. And that's really the best way of assessing our performance alongside checking on the capital and expense synergies.

The 10% accretion when we announced it back on the 23rd of December had three components to it. So it had the profits from Direct Line coming into the group. It had the performance improvement that we then expected to realize and it had the benefits of the synergies. Additionally, of course, it was measured at that point in time. So, it was incremental to Aviva's outlook and its business plans then, kind of, at that point in time. So, all of that means it's a little bit complicated. But if I do unpick the components, we're very comfortable that the accretion on the deal is better than the original 10% that we originally communicated. But our focus is always going to be on hitting the group targets and the synergy realization that we've talked about.

On the soft market conditions and the combined operating ratio across the books, I mean, I think there maybe Charlotte will have a little bit more to add, but we've still got the ambition for the undiscounted core at less than 94%. And I think what you see in the Personal Lines -- in the General Insurance U.K. business today is that we're hitting -- we're sort of below that. And all of our assumptions are on the market. We can see the market stabilizing in Personal Lines, I think, at the moment, but our assumptions are basically on the current market conditions and I think are realistic in terms of what the outlook on that is.

You also have to remember that when we are looking at the mix of business now, we now have a different distribution mix, because we've got all of the Direct Line business coming in as retail business and therefore, no commission and various other things coming through on that. So, you will see that benefiting the combined operating ratio. I don't know whether there's more -- you've got more to add?

No, I mean, it's all the same points. And then just the caveat that at the end of the day, though, we optimize for operating profit. So that -- because that aligns to the EPS and the ROE. So depending on market conditions, we would always potentially accept slightly higher core. But as Amanda says, the distribution mix that's coming from Direct Line is helpful.

Mandeep?

Mandeep Jagpal, RBC Capital Markets. Three for me as well. Just firstly, a follow-up question on capital allocation. You spoke about M&A, but given the high cash remittance target, would you consider an escalating share buyback or doing a high to mid-single-digit dividend growth if the cash and balance sheet positions allow?

And then on Workplace, I've spoken about this a bit already, but speculation around tax breaks for contributions being reduced in the upcoming budget. To what extent do your expectations for this business reflect what seemed to be, at least in recent years, annually recurring disincentives to save into DC pensions?

And then finally, I appreciate it might be a bit soon for this one, but given that you've been busy on DLG. But could you talk about the role of the life businesses in Aviva going forward? At the lower returns on capital and annuities, in particular, look to be quite competitive given all the new capital coming in, would you consider further accelerating the move to capital-light by doing something reinsurance or disposal, something similar to your European peers, for example?

Okay. Shall I pick up two and three and you pick up one, Charlotte?

Yes. I mean, I suppose just on -- I think, if I understand your question, the cash remittances that we've got come from the capital generation and our effectiveness of turning that capital generation into cash, which support the dividends and the buybacks. All of that together is part of the capital allocation framework, which is about investing in the business. We never look to hold on to capital that we don't need. So that can consider share buybacks.

But what we're doing this year or planning to do is reestablish the regular and sustainable buyback at the kind of effected for the increased share count. So it will be the GBP 300 million that we used to have plus the effect of the 14% share count increase, so around GBP 350 million.

As we progress, though, we're always looking at the capital allocation framework in exactly the same way. So everything that we've got is entirely consistent with that. So you should pencil in the regular and sustainable capital returns and you should pencil in the mid-single-digit cash cost of the dividend, and that's it.

Which we only set the dividend policy, like [indiscernible] And so on Workplace, so if we think about what's happened in the market over the last 5 years, you've seen COVID, you've seen the Ukraine war, you've seen cost of living crisis and yet contributions have completely held up on Workplace. I mean, it is just like a train that has fully left the station, not going to stop.

The budget speculation is clearly unhelpful. But I think if we think about auto enrollment and if we think about the Workplace business, people will still be saving into pensions and that regular contribution that we're seeing today will carry on. And so, I think that's all to the good. Where we would, I think, say that the government really needs to think carefully is on things like salary sacrifice, not because it will necessarily affect contributions, but it could cost employers more.

And obviously, it could make employees think about how much they may salary sacrifice. And it's not just your mid-income earners that salary sacrifice, it is also some of the lower income earners as well. So we would very much encourage that, that is thought through. And even if you use -- the government's own research, it suggests that 15 million people in the U.K. will not have enough money to retire well.

And the ABI have issued, I think, some data this morning, which -- a research, which basically says that people will really -- 40% of people will consider if there are changes to salary sacrifice, how much they salary sacrifice or whether they salary sacrifice at all. So, I don't think it significantly changes Aviva. But I mean, I think for the U.K., I don't think that would be -- I don't think that changing things like that on long-term pensions is a very good thing at all.

On the point around the retirement and the sort of interplay between the sort of capital light and capital heavy, I think that we should not underestimate the role that the retirement business plays in Aviva in terms of the capital and cash generation. And I think that the business has done incredibly well. We're seeing really good growth in individual annuities. Clearly, as interest rates reduce, we'll see -- I'm pretty sure because of the amount of money tied up in property, an opportunity for equity release will reemerge. But also on bulks, yes, the market is more competitive, but we have written GBP 4.5 billion this year. I think I'm incredibly proud of what the team have done, because what they have not done is sacrifice margins for volume because that would be really stupid.

So effectively, what they're writing is that mid-teens IRR. And obviously, the added benefit to that is you're using less capital to write those deals. So, I think the team have been very disciplined. They've done a really, really good job. It plays a really important role in terms of that balance of the -- if we get to '28, 75% capital light, 25% capital heavy. I think that's about right. And that's really how we think about it as we look forward. But we shouldn't underestimate the competition, you never should. But I think it's all about the discipline. And that's -- and I look at Doug, and I know that he and Dave have got that firmly in hand.

Tom?

Congratulations, guys. Wow, 11% EPS CAGR. I think that's fantastic. And on top of that, it seems there are quite conservative assumptions in there. Can I just ask again on the personal and commercial assumptions? How do you see the outlook there for U.K. motor pricing and for U.K. commercial pricing? Because I guess the headline data is a little bit negative at the moment.

And the second question is just on Solus and DLG's repair network. I couldn't help but think I wouldn't want to be a competitor against you in that U.K. Personal Lines market. You put a really convincing case there as why you're #1. How much of that repair capacity do you think you own in the U.K. at the moment?

Well, there must be 1/3...

Very very quickly. I haven't done the numbers. What was the cash conversion from IFRS earnings to cash before? And what is it now? Because it feels like it's gone up to me.

Okay. So on the market data, so let's just sort of break it down. If we think about the U.K. GI, Personal Lines, motor, so external data is suggesting that the PCW new business pricing is down 10% in the first 9 months of this year. Aviva and Direct Line combined is flat year-to-date, okay? So, we have been less impacted than the market.

Also importantly, we have good rate adequacy across the book, remembering where we've come from over the last number of years. And so, when we talk about this business, we are -- the motor business, you hear from Owen this morning, we've got deep technical expertise, and we are basically writing to make sure that we deliver the right return. And we will bring the Direct Line business up to that standard in terms of the underwriting return.

In terms of the way that it's looking in the go forward, I think we would see some sort of stabilization at the moment. And obviously, we know that -- we know what the inflation rate is. So you sort of -- it's math at the end of the day. And so, we will be maintaining our discipline there.

If we look at home, the external data suggests that the PCW new business pricing is down 12%. If we look at the Aviva and Direct Line combined PCW new business rates, we're up 1%. So again, less impacted than the market. Again, I think we are benefiting there from the discipline, and we're also benefiting in home from the distribution.

So if you remember in home, we've got a wide distribution across partnerships, across intermediaries and also across the direct business. So what that does is it protects our position somewhat there. And just remember, when you're thinking about volumes going forward, obviously, we've got the Direct Line business coming in. We've also won the nationwide home deal, and that will start to enter into the numbers, I guess, in the first quarter, is that right? In the first quarter of next year. So that is a sizable deal.

What you're seeing, I think, is the benefit of scale because it really does matter. And if when you're investing, if you think about your investment in pricing models, in fraud models, in all of those things, for Aviva, we are spreading that cost across many products. If you are a monoline player and you're just able to invest that, if we think about generative AI, that investment that we've made in the claims summarization, we're able to now roll that into travel, into health, into all of the other areas.

If you're just invest in it, then the cost has to be borne by just that one product. So I think that is a real advantage of the scale model. So it's about sophisticated pricing, technical expertise and scale. And then, if you -- I like the comment on the Solus and the DLG network, that is significant. I mean, we recognize the real importance of that owned network, not just in terms of the cost, which is GBP 500 per claim, as Jason said, but also in terms of the turnaround, in terms of getting your vehicle back more quickly.

And therefore, the customer experience is better. Therefore, therefore, customers are happier with Aviva. We have started to take up some of the slack in the repair capacity of the direct Line garages that weren't utilized as highly as the Aviva garages.

In terms of what the actual share, though, I don't know that in terms of what the share of the garage network, but we know that nobody has replicated. And it's very, very difficult to replicate what we have. And if you walk into some of these Solus garages, I mean, you literally could eat your food from the floor. I mean, it's like so sophisticated in terms of like the equipment and everything else. And by the way, we're rolling out that model in Canada as well.

Charlotte, on the cash conversion?

Yes. So cash conversion, I am actually going to have to ask the team to come back with a precise number for you or even a more specific number for you. But the general capital-light pivot will drive greater alignment between earnings and cash more generally. And kind of, I would expect the proportion of payout to reduce over the plan period. But the team can come back to you with some more specifics.

Let's go to William and then James.

William Hawkins from KBW. I hope these three are brief. Are there any important changes in strategic asset allocation that you've thought about over the life of these projections?

Secondly, what do you think non-operating investment variances should be below the operating line in this projection period, 0 or hopefully positive, I don't know, maybe negative?

And then lastly, sorry, you have had a lot of questions on solvency already, but I'm still not quite clear. The assumption about organic growth in the SCR over time. It had been running at GBP 200 million to GBP 300 million before this year and then went very low in the first half. And I'm just not quite clear what you're thinking about change in SCR, leaving aside synergies, the organic change.

I mean, no significant changes in the asset allocation. I mean, obviously, as time and the book moves over time, the team will, as part of the overall asset and liability management strategy kind of shift accordingly and look for different opportunities. But no underlying -- no big changes in the assumptions here. I think the one point to mention, and I think Amanda mentioned it in her opening remarks is that we are in the process of moving the Direct Line assets across to Aviva Investors. About half of those will be -- some are already done, about half will be moved by the end of the year.

And kind of over time, because they were stand-alone, they had a slightly different way of looking at the asset portfolio than we will on a group basis. So, we will look to move that, but it doesn't have material consequences as a result, but that's important. And actually, that act of moving to Aviva Investors removes some of the external cost of that and is added to the AUMs in Aviva Investors.

In terms of...

It was the non-operating investment variances.

I mean, we don't make -- we build the whole plan on the sort of current market dynamics and the shape of the curve. So, as the forward curve has interest rates expected to come down, but that's kind of how we build the plan and then we do sensitivities around that. But there's nothing -- we don't take a view on rates as we bought -- other market assumptions as we build out the plan. So therefore, I don't have a sort of non-operating variance number to build in. It's assumed to be neutral.

And then, what was the last question?

On the solvency organic growth in the SCR.

So yes. And I suppose thinking about the strain. So I suppose the OCG has been, as you say, about 200 to 300 less than the OFG over the last few years. And that's kind of the difference between the business growth and how that drives SCR. The SCR increase this year, we'd expect to be a little bit lower. It reflects the lower volumes of BPAs as well as the fact that the business we've written has been at lower strains than it has historically. But I think the important thing to remember is that -- and I've tried to articulate a couple of times, as synergies are recognized, we expect this 20 points of OCG, which is including the normal level of management actions to come through, which is and to build from there. So that's growing from what was a 15 percentage points back in '24.

James?

It's James Shuck from Citi. Just three quick ones left from me, please. Firstly, I think you previously kind of had a kind of target level for central liquidity around the GBP 1 billion level. So, it's obviously a bigger group now. Is the GBP 1 billion still the number to be looking at? Or is that perhaps a bit higher?

Secondly, perhaps I can ask the SCR question in a slightly other way. What's the capital release, the annual capital release from the Heritage book that's running off because presumably there's some benefit that's reducing the strain within that?

And then finally, just interested in the 4.4 million new customers from Direct Line that you'll get. How much of that obviously coming out to renewal? And how much -- what kind of renewal rate are you expecting on the GBP 4.4 million?

So on the liquidity, I mean, we're comfortable with the GBP 1 billion number even post Direct Line. It is elevated at the moment, partly because we've got the GBP 900 million redemption to pay for over the coming months. So hence, October, it's a bit higher in preparation for that. So -- but no real change on the guidance.

On the SCR, I mean, we don't break that out for Heritage. Again, maybe it's something we can take up with the team afterwards. I don't have that, and we don't break it out usually.

So on the retention rates, we don't -- we're not going to break give you out all the retention rate then we start breaking down all of it for the individual product lines, so we're not going to do that. What we would say is that we would expect the retention rates to be broadly in line with the Aviva retention rates and will very much be driven by the competitiveness in the market, obviously. But we have seen retention fairly steady and in fact, improving, I think, a little bit, Owen, since the deal completed. And we don't see that there's going to be any issue with the retention. It would all be about the price and the product that we offer to the customers. And we've actually written to all of the customers already to say that we've done the deal. There's been no disruption at all from that.

We're running over slightly, but perhaps we can just finish with Abid and then Nasib.

It's Abid Hussain from Panmure Liberum. Just two questions, I'd be really quick. The first one is on motor insurance pricing over the longer term. So perhaps a more philosophical question. Do you think the consolidation across the motor insurance market helps price rationality across the market? Or will the underwriting cycle always endure? I know you've already pointed to your pricing being more different -- moving differently year-to-date than the market. So any sort of views that you can share, that would be helpful. That's the first question.

And then the second one is on PCWs versus direct distribution. Being now the #1 player by far, does that change the dynamic for you in terms of direct distribution versus PCWs versus brokers? To me, it feels like you should be able to eke out more margin from PCWs, brokers, partners if you're putting more volume through for their pipes now. Does your change -- does it change the dynamic or preferences at all for you?

So, I think on motor insurance prices, I probably -- I've said what I think where we are now, and we know what the inflation is. In terms of price rationality and consolidation helping, I think consolidation obviously does help with that and visibility around reporting definitely does help with that. But I think also, you have to look at the different dynamic and of scale.

And as I spoke about earlier, your price is a factor of what your expenses are. And if you've got lower expenses and if you've got better pricing models, you're going to be able to deliver a better price. And some of that you'll keep for margin yourself and some of it, you'll play back into the market. I mean, that's just trading. And that's what Owen does probably about like 15 times a day and he's constantly looking at the different dynamics that are going on in the market there.

But I think customers will ultimately benefit, because they will get a better proposition. It will be -- the service will be better. The claims will be better. The pricing will be better, because we are achieving the benefits of scale.

On the distribution dynamic, look, I think that it's fairly evenly balanced at the moment. And I think we do a really good job of managing that direct versus PCW versus broker versus partner. I don't see that changing significantly over time. What you will obviously see is the dynamic within the Direct Line book changing to more PCW as now we have launched on all four PCWs within a very short space of time. And as Owen said, we're seeing some real positive momentum from that in the early days. Because you've got to be present in order to have the opportunity to win the business, right? If you're present, then you've got a better chance of doing that. So, I think that's where you'll see the change.

Nasib?

Amanda, you gave us some good context around pricing versus the market. Can you tell us what's happened to volume as well, policy in force?

Second question on capital synergies, GBP 500 million by 2026. I know that's not fungible, but if you reinsure 50% of that like you do for the GI book, that's GBP 250 million. Does that go into the GBP 350 million buyback? Or is that -- should we expect a special return in 2026?

And then final question on Slide 17. If I take the GBP 225 million cost savings divided by the GBP 2.2 billion, I get 10%. You're putting 2% per year over the next 3, that's 6%. So what's the delta?

Okay. So on the PIF, I think I would say, I'm probably repeating myself. Our absolute priority is to get the performance of the Direct Line brands to the same level as the Aviva Retail brand. So that's our performance. And we're not motivated by the number of policies enforced and motivated by the profit that we're going to make. And that is the way that we think about it.

On saying that, we have seen, as Owen said, some green shoots in terms of the policies in force following the -- going on to the price comparison website. So, I think that's early signs of positivity there. But I will never be managing this business. And I can tell you that it's for every line of business, it's not just for motor. We do not manage on policy count. We will manage on profit. And you've seen that in whether it's in bulk or in home or in motor, that's the way that we think about it.

On the -- on your second point around the more capital and special returns and dollar. Do you want to take that?

Yes. So look, realizing the capital synergies is really important and it helps us get the solvency ratio to be above the top end of the working range. Then essentially, the uses of capital will be determined in the usual way on the capital allocation framework. So we have three main uses of capital to make sure that we are able to meet the dividends to -- which is essentially supported by the cash remittances, investing in the business and returning to capital to shareholders. So we'll have optionality, but we'll deal with it in that normal way.

And what was the other question? The GBP 225 million. So, earnings are growing each year, and we're talking about a compounded growth rate. But the GBP 225 million is kind of driving the 2 points in the cost synergies, the share count, the 2 points. And so everything else is coming from building the earnings, which is growing each year.

[indiscernible]

But it's a compounded. Let's take it offline at the end.

Okay. I think that's it. Okay. So there's a lot of questions there. A lot of people in the audience as well. So a huge amount to unpack. And we know we've delivered a lot of detail today. The team are around to answer any follow-up questions like the last one. Thank you very much.

Today, we're announcing three key things. First, that we have delivered another strong set of results in Q3, growing across the group from General Insurance in the U.K., Canada and Ireland right through to our leading wealth business. This means we're on track to meet our current 2026 group financial targets at the end of 2025, a full year ahead of schedule. We're set to exceed GBP 2 billion of operating profit and GBP 1.8 billion of own funds generation this year. And to be clear, these targets will be achieved before any contribution from Direct Line, a huge testament to the strength of the underlying Aviva business. I'm incredibly proud of the team for such a fantastic achievement.

Second, the integration of Direct Line is already well underway, reinforcing our belief in the full potential of this deal. So we're raising our expectations on the benefits that we will realize, increasing cost synergies to GBP 225 million and confirming significant capital benefits of at least GBP 500 million. The acquisition also accelerates our capital-light earnings strategy, and we're set to surpass 75% by the end of 2028.

This is highly attractive for our shareholders because it means that we are delivering stronger growth and better returns using less capital. And finally, but perhaps most importantly, we're raising our ambitions yet again with new 3-year targets. We have a new operating EPS target of 11% through 2028. We're aiming to deliver a return on equity of greater than 20% by 2028.

And we're refreshing cash remittances now with bigger ambitions of over GBP 7 billion. So to sum up, over the past 5 years, we have transformed Aviva, and we are in a stronger position than ever today. We are the U.K.'s leading diversified insurer, delivering a clear strategy and consistently strong performance for our customers and shareholders. We've achieved a huge amount, but as we enter this new chapter, we know there's still much more to come from Aviva.

Okay. Good morning, everyone, and thank you for joining us for this In Focus session. So today, we'll talk through our Q3 trading results, the progress on the Direct Line integration and also our new financial targets. So there's a lot to cover. I'll start with a high-level overview of each of these elements. Charlotte will then provide more detail on the financials. And finally, Jason and Owen will update you on the Direct Line integration, our progress to date on why we're so excited for the future success of the Personal Lines business. And of course, we've left some time for the Q&A.

So let me start with the key messages. First, we've delivered another strong set of results in Q3. This continued momentum across Aviva means that we are on track to meet our group 2026 financial targets at the end of 2025, a full year ahead of schedule. And to be clear, these 3-year targets will be achieved before any contribution from Direct Line. That is a huge testament to the strength of the underlying business.

Second, we are raising our expectations on the benefits that we will realize from the acquisition of Direct Line. Increasing cost synergies to GBP 225 million and confirming significant capital benefits of at least GBP 500 million. The integration is already well underway. And while there is still more work to do, our early wins are very encouraging and have reinforced our belief in the full potential of this deal.

And finally, today, we are raising our ambitions for the group with new 3-year targets, which better reflect the scale of the opportunity we now have, our diversified capital-light business and our confidence in delivery.

To put today's presentation into context, I want to take a moment to look back and reflect on just how far we've come. Over the last 5 years, we have transformed Aviva. We have put the business on a sustainable growth trajectory, stepping up for our customers and, of course, for our shareholders, returning over GBP 10 billion of capital and more than doubling the share price. We are the U.K.'s leading diversified insurer, executing on our consistent strategy, extending our track record and powering growth organically and with M&A.

We've achieved a huge amount. And at this point, I really want to thank the whole Aviva team because all the progress made is done to their hard work. And whilst this is the start of the next chapter for Aviva, our focus is unchanged. We will continue to accelerate capital-light growth unlock our customer advantage and deliver on shareholder promises.

Now briefly touching on Q3. I'll share just a few highlights before Charlotte will cover the detail a little later. Quarter-on-quarter, we've been delivering strong profitable growth, and Q3 is no different. We are growing across the group from General Insurance in the U.K., Canada and Ireland, right through to our #1 wealth business, which now has over GBP 220 billion in assets. We're translating this top line growth into stronger earnings and returns. For the full year, operating profit is tracking towards GBP 2.2 billion, with growth well into the double digits, and we're set to deliver an IFRS return on equity of around 17% which has almost doubled over the last 3 years.

And there's no shortage of growth opportunities across the businesses, which gives us the confidence to continue raising our ambitions. As I've already said, we are set to achieve our 3-year target a year early on a stand-alone basis, which is a fantastic achievement. Let me give you the numbers here. We are set to exceed GBP 2 billion of operating profit and GBP 1.8 billion of own funds generation this year. And as you'd expect, we will meet our cash remittance target, which is cumulative in 2026. I am really proud of Aviva's excellent performance, but obviously, we are not stopping here. There are so many opportunities for us to go after, further and faster. So let me talk you through 3 of them. Firstly, the potential that we see in Direct Line; second, continuing to accelerating capital light; and third, our customer advantage.

So let's look at it first at the opportunity with Direct Line. With this deal, we have created the leader in U.K. Personal Lines. The strategic rationale was always compelling. It enables us to power capital-light growth and expand our customer base. And the financial benefits are just as attractive. In fact, there is even more potential than we first thought. And that's exactly why we're raising our ambitions here. We aim to deliver GBP 225 million in cost synergies. That is in addition to Direct Line's existing commitment for GBP 100 million in cost savings. And we are pleased to confirm at least GBP 500 million of capital benefits. All of this has allowed us to enhance shareholder distribution. We are uplifting our dividend this year and expect to resume share buyback levels at a higher level when we report in March 2026.

We are integrating Direct Line at speed, making real progress in only 4 months. We've put a single Personal Lines leadership team in place who have a strong technical and commercial grip on the business and trading performance. We haven't missed a beat for customers, and we are leveraging the power of our group model, transferring half of Direct Line's assets to Aviva investors with more to come. As you'd expect, we are focused on delivering early cost synergies. We are on track for GBP 40 million by the end of this year, a material step towards the GBP 225 million ambition and work is well underway to unlock the capital benefits. So it's been a great start, and Charlotte and I continue to lead the integration, ensuring that we carry this strong momentum through.

Now let me turn to the second opportunity, capital light. We continue to accelerate here. We are set to surpass 75% by the end of 2028 by growing faster in capital-light businesses and unlocking the synergies from Direct Line. This is a material shift from where we were just a few years ago. This is highly attractive for our shareholders because it means that we are delivering stronger growth and better returns using less capital. Of course, the complementary nature of our businesses remains a unique advantage of Aviva's diversified model. So we will continue to deliver disciplined growth in retirement too, driving capital and cash generation and supporting our dividend.

The third opportunity we see is with our leading customer franchise. This is a key source of competitive advantage, which has only grown with Direct Lines. We now have nearly 22 million customers in the U.K. alone, giving us one of the largest franchises in U.K. financial services. We are the standard insurer and bigger than most major banks. Over 7 million of our customers have multiple policies. We know the benefits of these customers. They are more engaged and they will stay with us for longer.

The sheer scale of this franchise presents a growth opportunity that only Aviva can unlock. We offer a full range of products to support customers throughout their lives. And now with this acquisition, we've added more products and capabilities such as pet, rescue and micro-SME. Over the last 5 years, we've invested heavily in digital and our technology from having all of our customer data in a single view right through to transforming engagement with artificial intelligence. And we will bring the full Aviva experience to our new Direct Line customers.

Now to bring all of this together, as you've heard, we are announcing new 3-year group targets today. These account for the acquisition of Direct Line and better reflect Aviva's trajectory as a diversified capital-light business. We have a new operating EPS target of 11% through to 2028. Linked to this and on an IFRS basis, we are aiming to deliver a return on equity of greater than 20% by 2028. And we're refreshing cash remittances now with bigger ambitions of over GBP 7 billion. So that's a high-level view.

I'm now going to hand over to Charlotte, who will take you through the detail on the financials, including our thinking on the new target metrics.

Thanks, Amanda, and great to see you all today. I'm going to start by spending a few minutes covering the key points from our Q3 trading update before moving on to the detail about the new group targets and upgraded Direct Line synergies.

So Q3 was another quarter of strong performance. Across our General Insurance businesses, premiums of GBP 10 billion were up 12%. This was strongly supported by 17% growth in U.K. and Ireland, reflecting the additions of Direct Line and Probitas as well as continued positive trading. Canada grew by 3%, driven by pricing increases in Personal Lines. And this was despite some portfolio actions taken in Commercial Lines that I referred to at the half year. The group undiscounted COR was 94.4%, an improvement of 2.4 points with the U.K.&I achieving 93.8% and Canada, 95.4%. These strong results reflect the earn-through of our positive discipline on rate, some modest prior year development and better weather.

In IWR, the momentum of our Wealth business continues with net flows of GBP 8.3 billion, representing 6% of opening AUM once again. Performance remains strong, and we are on track to meet our ambition of GBP 280 million of operating profit in 2027. Insurance sales were slightly lower year-on-year with double-digit growth in health more than offset by low volumes in protection. And as I said at the half year, this effect was expected as we consolidated the AIG and Aviva propositions in August of last year. We've seen good increases in new business margins as we've repriced in line with plans and continue with the integration.

In Retirement, sales of GBP 5.3 billion were lower following a particularly strong Q3 last year. Now the BPA market remains competitive, and we are pleased to have written GBP 3.9 billion of volumes across 63 deals by the end of Q3. And as of today, this has risen to GBP 4.5 billion, which we expect to be materially consistent for the full year. The pipeline remains healthy into next year. And as always, we remain disciplined, focused on writing business at strong IRRs.

And finally, turning to our balance sheet, which includes Direct Line for the first time. Our solvency ratio is 177% in line with our previous guidance to be towards the top end of our 160% to 180% working range. And as a reminder, at this stage, the solvency position is before any of the expected capital synergies which I'll come back to shortly. Lastly, leverage is 31.4%, allowing for the Tier 2 debt instrument, which we recently announced will be redeemed in December at its first call date.

Now Amanda has already explained that we are on track to deliver our Group targets a year early. This is a fantastic achievement that I shouldn't and won't walk past. We've seen exceptional performance over the past couple of years with growth in operating profit right across our diversified business. And this demonstrates the grip we have on performance management to actively manage our businesses through the cycle and outperform our peers.

And as you can see on this slide, with a few weeks remaining this year, we are forecasting a full year 2025 operating profit of approximately GBP 2.2 billion. This includes the 6 months of contribution from Direct Line of around GBP 150 million. We're also on track to hit our Solvency II own funds generation target of GBP 1.8 billion in 2025 also before any Direct Line contributions. And the cash remittances target, which is a cumulative 3-year metric, set at greater than GBP 5.8 billion between '24 and '26.

We are comfortably ahead of schedule. By the half year, we'd already delivered GBP 3 billion in the 18 months since setting the target and anticipate to be around GBP 4 billion by the end of this year. So given this excellent progress, now is the time to set out new 3-year targets. Targets that reflect the shape of our group now and as we deliver our plans for the next 3 years to 2028. These new targets are framed as ambitious developments in operating EPS, IFRS return on equity and cash remittances. And in defining and shaping these targets, we have considered market feedback on the measures that matter the most. They allow better comparability with peers and align with our capital management policy and strategic ambition to accelerate growth in capital-light business.

So the first metric is defined as growth in operating EPS, and we are targeting an 11% CAGR from 2025 to 2028. We selected this metric to capture both the operating earnings growth as well as the impact to share count reduction from sustainable capital returns. So let me unpack where the 11% compounded growth is expected to come from. Firstly, we expect roughly 7 points of the growth to be driven by the power of the underlying business, including the turnaround of Direct Line. And as we continue to build on the track record of strong profitable growth across our diversified group. Secondly, we are continuing to integrate Direct Line. The delivery of cost synergies will drive around 2 points of the growth. And lastly, we intend to reintroduce regular and sustainable returns of capital in March 2026, which will add around 2 points to the reduction in share count.

And as outlined earlier, we expect to deliver GBP 2.2 billion of operating profit for 2025 or an operating EPS of around 55p. Now we will fix this as the baseline for measuring growth in operating EPS towards the 11% target over the next 3 years with 2028 expected to be around 75p. And to help with your modeling, we've included a slide in the appendix with further information. The second new target is IFRS return on equity, which we expect to be around 17% in 2025 and target greater than 20% by 2028. To achieve this target requires us to deliver strong returns and continue to shift towards capital light.

Now managing Aviva requires us to focus on both the IFRS and solvency views of the balance sheet, and our capital management framework is unchanged. Defining the target as IFRS return on equity recognizes that this measure is more widely used and understood by the market, increasing comparability. And we are well positioned to meet this target and drive attractive returns across the cycle. Again, more details in the appendix slides on the calculation basis for the IFRS ROE.

The last target to cover is cash remittances, where we are uplifting the target to deliver greater than GBP 7 billion between 2026 and '28. This represents a significant upgrade to our previous target and demonstrates the cash-generative power of our diversified business model. We have confidence in our capital management framework and the strength of our business to transform strong capital generation into cash remittances and ultimately, shareholder distributions. Our track record evidence is this. It's also worth remembering that in addition to normal cash remittances, this year, we saw some additional remittances internally of GBP 1.4 billion to fund the Direct Line transaction. Of course, cash remittances underpin our dividend and return of capital to shareholders, which brings me to the next slide.

So as you remember, we increased the interim dividend, which represents about 1/3 of the annual dividend by 5%, in line with our usual dividend policy and by a further 5% following completion of the Direct Line transaction. The approach in setting the final dividend is expected to be consistent with this, and we will -- and will be announced in March '26, alongside our full year results. And beyond that point, we will continue to grow the cash cost of the dividend by mid-single digits, in line with our dividend policy. And because we also intend to reintroduce regular share buybacks when we report in March '26, has an impact on DPS. In previous 3 years, the buybacks were GBP 300 million, and we expect to increase from this level to reflect the 14% increase in share count.

Now moving on to cost savings relating to Direct Line. Before I talk about the cost synergies relating to the transaction, I'm pleased to announce that Direct Line ambition of GBP 100 million of savings that was set out in July 2024 has now been completed. Incremental to these savings while increasing the cost synergies announced last December of GBP 125 million to GBP 225 million or about 35% of the Direct Line cost base. It reflects the opportunity to remove the meaningful overlap between the 2 Personal Line businesses. And Jason and Owen will shortly explain the progress on the integration, which is unlocking these synergies.

So expect about 45% of the savings to come from the removal of duplication at the head office level. 30% to come from automating, digitizing and rationalizing insurance operations and 25% to come from IT. And broadly, these savings are expected to be achieved evenly across the 3-year period. The cost to achieve these savings is estimated at GBP 350 million, a 40% increase from the original GBP 250 million compared with an 80% increase in the synergies. And overall, the ratio of cost to achieve to savings is expected to be around 1.5x.

At the same time, we are investing to bring the whole Personal Lines business up to a consistently high standard of customer experience and performance. And as an example of this, including continuing to transform the Direct Line claims process to align with Aviva's. This will bring considerable value in terms of claim costs and customer service and we're investing around GBP 50 million to unlock this value as well. Finally, an important driver of the Direct Line transactions comes from the capital synergies which I'm pleased to announce are expected to be greater than GBP 500 million. The capital synergies arise because the capital required to be held for the Direct Line business is lower when it is part of the Aviva group than was required when it was a stand-alone business.

This arises from the diversification of risk when modeled on a combined basis with Aviva's U.K. General Insurance business as well as a further diversification when modeled with the Life and Canadian risks at the group level. So on the left-hand side of this slide, I thought it worth illustrating what these synergies represent in terms of the Direct Line solvency capital requirement or SCR. Since Direct Line reported its 2024 year-end balance sheet, the SCR has increased to GBP 1.4 billion from regular exposure and market developments and a temporary uplift from the forward view of net integration costs.

Measured in today's terms, we estimate these synergies would add at least 10 points of solvency benefit to the current 177%. Unlocking this capital synergy is a substantial piece of work, and our team is making great progress with approval expected around the end of 2026. Now to help you with solvency ratio modeling ahead of this year and there are a few items worth flagging. We will see some further capital generation in the quarter with the usual guidance of around 1 point a month still suitable at the moment. We also expect to see further management actions in the fourth quarter, which means that total Solvency II management actions for this year will be above our normal guidance of around GBP 200 million.

Offsetting this, we have recently announced that the EUR 900 million Tier 2 instrument will be redeemed at its first call date in December. So allowing for each of these factors, we expect the Solvency II position at full year '25 to be broadly consistent with the Q3 position of 177% subject to market movements. And as mentioned before, we are comfortable operating towards the top end of our working range, ahead of the realization of capital synergies around the end of '26.

So that's all I have to cover. But before I finish, I just want to reflect on the hard work that our team has done to get us here. Aviva has seen significant turnaround in recent years, and we now have real momentum. The opportunity with the Direct Line acquisition is significant, and we are laser focused on the next phase of our growth, meeting our targets and delivering the Direct Line synergies.

And for more on how we're going to unlock this opportunity, I hand over to Jason.

Thanks, Charlotte, and good morning, everyone. So it's been just over 4 months since the deal closed and we are really looking forward to sharing some more details with you today. But just before we get into that, I'd like to start with some context on the role that U.K. and Ireland's general insurance plays for Aviva.

On a stand-alone basis, we already contribute more than 1/3 of the group's operating profit. Actually, we've more than doubled our profit contribution over the last 3 years. So U.K. and Ireland General Insurance is a key driver innovative shift towards capital light. We're already a market leader in Commercial Lines, and now we're also a leader in Personal Lines. We continue to get great feedback from our customers and brokers across the portfolio with Ireland and the Global Corporate & Specialty business give us the benefit of geographic diversification. And finally, I should just mention that we've been accelerating our GCS business with the acquisition of Probitas last year. Since completing that deal and as a result of launching 7 new lines of business in Lloyd's, fantastic broker support and a number of large client wins, we're already ahead of our plan on revenue synergies. And on the people front, we've now completed the process to transfer Probitas employees over to Aviva and we've announced new leadership.

Now looking at the Personal Lines business, which already accounts for around half of our profit and premiums. As you can see, the team has an impressive track record which is why we're so confident in the turnaround that we can deliver with Direct Line. The underlying Aviva business has seen strong growth in premiums, well into the double digits, and it's not just pricing. Since 2022, we've added 2.5 million policies in force, and we now serve nearly 7 million customers. We've always been highly disciplined in underwriting, and it's paying off. With our combined ratio below 94% because of our relentless focus on effective distribution, managing claims well and keeping our costs down. And we've done all of this through various market conditions which has allowed us to keep investing in the business. And that's why Aviva's Personal Lines is in such a great position today.

Now with Direct Line, we'll have over GBP 7 billion in combined premiums and we're a clear #1 in the market with unmatched scale. And in Personal Lines, operational scale is hugely important because it means we can benefit from lower cost to serve, greater capacity to invest and gain changing amounts of data. Together with Aviva's technical excellence and pricing sophistication, this is an incredibly powerful combination and one that will extend our competitive advantage and help us to navigate the market cycle even more effectively. But it's not just about efficiency gains. Our leading brands, product offerings and large customer base create fantastic optionality in terms of how and where we can grow this business. And as Amanda said, there's even more potential at Direct Line than we first thought. So we know there's an awful lot more to come from this business.

Now moving to the integration. This is a group-wide program with clear accountabilities across Aviva's Exco, robust governance in place, as well as dedicated resource and integration expertise. Our integration program has been up and running since January, which is a full 6 months before we'd even completed the deal. And so it's this preparation that helped us to move so quickly as soon as we got the keys, not only from a customer, operational and regulatory lens, but also rapidly embedding Aviva's leadership and welcoming our new Direct Line colleagues. So we are in a really strong position, and we're very focused on delivering our ultimate objectives.

We're acting on every opportunity to transform Direct Line's performance. It's clear that the business has benefited from the harder rate environment in 2024, and we saw this in the Direct Line profitability at the half year. However, written margins in the first half of '25 were not yet at the levels that we would be satisfied with at Aviva. So while they have been taking some action, we have significantly accelerated the turnaround. I just think that we're moving faster, making better decisions, and we have more at our disposal. We now have a single leadership team in Personal Lines led by Owen.

And beyond the immediate people changes, we've taken swift action across a number of areas. We brought together our data sets to enhance pricing across the book. We've deployed new and more advanced models. We've broadened our underwriting footprint, and we've completed the rollout of Direct Line onto all 4 PCWs. And since the beginning of July, we've already unlocked early benefits, improving Direct Lines written combined ratio on motor by 4 points. And as you'd expect, we will see further impact as our actions continue to earn through over time. And we're moving just as quickly on cost synergies. We're rightsizing the business to remove over 300 duplicate roles this year, including the leadership transition on day 1.

And we're optimizing our supply chain. We've streamlined more than 70 of Direct Lines' non-claims suppliers with over 200 currently under review. And around 60% of our claims supply chain spend is already shared. So we're focused on harmonizing the rates we pay there. As a result, we are well on track to deliver around GBP 40 million of synergies by the end of this year. And all of that was achieved in the last 4 months alone. So we're really confident about how much more we can do over time.

Now moving to our integration plan, which is focused on 4 key areas. I'll say a few more words about leadership and organization and the opportunity we have across customer and integrating operations before handing over to Owen, who will talk you through how we are approaching commercial and brands. Obviously, to make this a success, we need the right people. So we announced our Personal Lines leadership team in September. And this is aligned to Aviva's channel-focused model with the benefit of sharing functions across GI and the group. Year after year, we have already proven that this is a winning formula. And why am I so confident that this is the right team. But it's the same team that has driven the impressive transformation of our Personal Lines business over the last 4 years.

We've successfully navigated challenging market conditions and delivered strong profitable growth right through COVID, periods of high inflation and the introduction of pricing practices where many others struggled. We've transformed our claims journeys and repair capabilities through Solus with a material uplift to Net Promoter Scores and claims cost savings. And they successfully put the Aviva brand on PCWs, shifting our distribution to majority retail. So for these reasons and many, many more, I know that this is the right team to invest behind.

Turning now to the customer opportunity. This acquisition means that we've now got over 12 million of them. So we're working really closely with Charlotte and her team on 3 key areas. The first is on retention and growth. 2/3 of Direct Line 6 million customers are new to Aviva. So our immediate priority is to keep them at renewal. Second, we want to serve more customer needs. Aviva is well ahead of the curve here. So we're going to offer our broader product range to Direct Line customers. And third, we'll transform their digital experience because we see real value in driving self-serve and digital adoption at Direct Line. And we're also consolidating all the data into our single customer view. This makes a huge difference in delivering the best possible experience because we can see all of their interactions across all of our products. And our MyAviva app is critical here. And we expect the first Direct Line customers to be able to view their policies on our app by the end of next year, bringing the full Aviva experience to millions more.

Next, on claims, where we now have unmatched scale with GBP 4 billion in combined spend. And with that scale comes powerful advantages. As I said earlier, we're optimizing our supply chain. We're deploying artificial intelligence more widely like our client claims summarization tool, which is already used by over 500 Aviva handlers and it's half the time that our customers are on hold. We're further strengthening our data sets and feedback loops. For instance, we're already sharing critical information like fraud insights and supplier cost trends with the pricing and underwriting teams. And we're capitalizing on our owned repair network, which is the only one in the U.K. Solus is already very high performing, saving us around GBP 500 per repair and halving the time it takes and we're bringing Aviva's back for best practice to the Direct Line network.

Finally, we're moving to a single claims operation built on Aviva's proven model with a relentless focus on end-to-end outcomes. We've already successfully reengineered our motor claims journeys, delivering top-tier experience and unlocking over GBP 85 million of claims cost savings. And we're expecting to deliver at least GBP 50 million of savings in Direct Line.

Finally, let me just touch on technology. We're starting from a really good place because we already have fit-for-purpose technology. Our platforms are compatible with one another, and we have many common applications, especially in the critical areas like pricing and data. So our focus now is to simplify the tech estate in a pragmatic way. We will be moving Direct Line on to Aviva systems, which we've already modernized over recent years. And we've already firmed up plans to accelerate cloud adoption and close 2 on-site data centers as well as to move on to a single claim system. And as in all other areas, we'll be aligning Direct Line to Aviva's operating model. So there's lots more to do. And I'm really excited about all the possibilities for this business and what we can build on over the next few years.

So with that, I'll now pass to Owen to share some more detail on the opportunity in commercial and brands.

Thank you, Jason, and good morning, everyone. As you've heard, the acquisition of Direct Line will significantly expand the opportunity we have in U.K. Personal Lines. The market accounts for over GBP 35 billion in premium. That's a big opportunity, and it's a highly profitable one for players who are consistent and disciplined through the cycle. And year-on-year, we've proven that we can do that. Now the shape of our combined business is a key strength. We're the #1 player in motor and home and importantly, we're not over reliant on any specific product.

From a distribution lens, we're more weighted towards retail, which is attractive because we directly own the customer relationship, and it's more profitable. And as Jason said, with Direct Line, we now have the critical benefit of scale well beyond our peers. That will enable us to navigate market conditions and trends even more effectively. We can drive cost efficiencies, invest more in technical capabilities and brand and ultimately continue to outperform in what is a competitive environment. We also have the unique advantage of a complementary and diversified portfolio, covering the full breadth of the market.

Let me unpack that for you, starting with retail. Our direct book serves customers who come straight to Aviva. They expect a rich product, full service and are more likely to hold multiple products. PCW is the largest and fastest-growing channel in the market and is an important driver of customer and profit growth. And we also have the new Direct Line products across pet, rescue and micro-SME. We have real growth headroom here, which I'll cover later. The intermediated side of the business plays an equally important role. While historically strong in this space with leading broker and distribution relationships, both within GI and across the group.

Aviva Private Clients is our leading high net worth proposition for mid through to ultra high net worth clients. Our broker business further expands our customer reach, often serving customers who need advice for their insurance requirements. Finally, partnerships serve customers of leading U.K. banks as well as other key partners, harnessing their brand and reach. So each segment plays an important role. And we have leading market positions across the board, giving us the right to win today and in the future.

So when it comes to our retail channels, our brands are crucial to enabling both customer choice and unlocking commercial success. Aviva already operates a multi-brand strategy on PCWs so we know exactly how to manage this. And we've done so with great success, nearly tripling policies over the last 5 years and maintaining a strong retention rate throughout. Aviva Zero is a great example of this in action. We launched the brand in early 2022. And since then, we've grown to almost 1 million policies in force. Over the same period, we've added a similar number of policies to Aviva online as well. And we've seen very low levels of switching between the 2.

In other words, any overlap is significantly outweighed by the benefits of choice for customers and incremental profitable growth to us. And with Direct Line, we now have an even broader set of brands, which grows our advantage. Not only we extend new customer reach, but we're also increasing presence on PCWs, both of which drive stronger commercial outcomes. And we provided customers more choice and flexibility as their needs change from lower cost cover through [ quote me, happy in Churchill ] right through to more affluent customers with Aviva signature, our premium direct proposition and everything in between. Of course, deploying these brands in the right way is critical. We're clear on our target customer segments for each, differentiated across important factors like affluence and age right through to lifestyle. And we also know how each brand resonates differently. This allows us to minimize overlap while giving customers freedom of choice. So collectively, all our brands form a powerful customer engine, which is unique to Aviva.

One area I'd like to cover in more detail is the Direct Line brand on PCWs. This is a huge growth opportunity, and we're accelerating progress. After more than 12 months, Direct Line was still on just 1 PCW. And in the last 90 days, we've helped the teams get live on all 4 major names. As Jason said earlier, we're also transforming Direct Line PCW performance with Aviva's technical capabilities. There's a long list, so I'll just pick out a few highlights. We've rolled out more sophisticated risk models, including bodily injury. And we've increased the frequency of pricing changes by more than 50% since June. We've streamlined processes to accelerate the pace and quality of decision-making across trading and performance management, we've increased quotability through an expansion to underwriting footprint. We've shared data sets across the 2 businesses and put efficient feedback loops in place, and we now have more claims data than anyone else in the market.

And finally, we're following Aviva's pricing and underwriting led approach to embed margin discipline across the book. This is our DNA and has served us well through many different market conditions. Our primary focus has been on margins, and we're already starting to improve loss ratios. We're also seeing the earliest green shoots of momentum on volume with a policy account for Direct Line PCW more than doubled where it was at the half year, but our focus will always be on margin first. And we've done this before. With a clear track record of building and rapidly scaling on PCWs with Aviva online and Aviva Zero. So I know that we're bringing all the right capabilities to deliver the same success to Direct Line.

As well as enhancing existing lines, we also have attractive opportunities with new products. As you can see, market shares are low relative to the rest of our portfolio. So we're confident that with targeted and careful investment, we have real potential to unlock more growth. In rescue, we want to accelerate by capitalizing on opportunities across our value chain including our own distribution, partnership capabilities and claims. In pet, we're intending to build a new Aviva branded product to capitalize on the PCW opportunity and tap into Aviva's existing customer base, including through MyAviva.

Micro-SME primarily covers vans and small-scale residential landlords, which already formed part of our Personal Lines business. This has always been complemented to our Commercial Lines business, which serves SMEs and corporate customers by brokers, and we can use our expertise to accelerate here.

Finally, on notability, where we provide fleet cover for the scheme at leases vehicles to people with disabilities or long-term health conditions. We are already bringing strong capabilities to deliver on our joint partnership priorities. And while others have struggled to succeed in partnerships, that has not been the case for us. In fact, we've consistently written at attractive combined ratios in our partnerships business.

To wrap up, together with Direct Line, we now have even stronger competitive advantages, setting us well apart and enabling us to be the standout #1 player in the U.K. We have leading positions, a strong track record, well-known brands, a full suite of products and first-class technical capabilities in pricing, underwriting and claims. These strengths will set us up to win both now and for the longer term. And with our unparalleled scale, we'll keep investing to unlock even more potential. So I'm excited for the future of our Personal Lines business and what we can achieve.

And with that, I'll hand back to you, Amanda.

Okay. Thanks, Owen, Jason and Charlotte. So before we move on to Q&A, let me share some final reflections on what you've heard today. So as you can see, Aviva is in a stronger position than ever. Our performance trajectory continues with another set of targets achieved. We are well on track to unlock the huge potential with Direct Line. And our new 3-year targets reflect our big growth ambitions, and we know there's still much more to come from Aviva. In fact, we believe the investment case is now even more compelling.

We are the U.K.'s leading diversified insurer with market-leading positions across the board. We are majority capital light today, and we are set to surpass 75% by the end of 2028. We are executing a clear customer-first strategy now for even more customers. And we've got momentum. We're building on it quarter after quarter. We're delivering for our shareholders with enhanced distribution. And as a management team, we are confident about Aviva's future. So thank you, everyone, particularly to Owen and Jason. Now Charlotte and I will move on to do the Q&A. Thank you very much.

Thank you. And just as a reminder, if you want to ask a question, just raise a hand and give us a moment to get a microphone to you. To start with, Andrew Sinclair in the third row.

Nice targets. So first, on the GBP 50 million of claims cost savings within Direct Line. Can you just tell us a little bit more about what's included in that, what scope the risk to go further on effectively improving the loss ratio and claims management within DLG?

Second, just on direct claims reserves when they came in. Just any color you can give us in terms of any adjustments made to the Direct Line reserves where they are brought into Aviva effectively as Direct Lines old business now reserved to the same standard, same levels as the Aviva business?

And just finally on the capital synergies, just how much of that is from just diversification versus how much effectively assumption changes from the cost saves coming through releasing any excess capital in Direct Line or into those lines? Just some detail on where that comes from.

Okay. Should I pick up one and you pick up two and three, Charlotte?

Yes.

Yes. Okay. So under claims, as Owen and Jason outlined, there's a huge opportunity there. We've got our combined indemnity spend of GBP 4 billion. And if you think about the garage network as well, and the savings that Jason was articulating there of GBP 500 when we use the Solus garage. And so where -- what that GBP 50 million will be, and we've demonstrated it in the core Aviva book. We've taken out the sort of GBP 85 million. Remember, that's a sort of recurring GBP 85 million once we've done the investment.

So what we're doing is investing GBP 50 million to deliver a GBP 50 million recurring savings, which you'll see coming through in the loss ratio. So it can be better fraud models. It can be better efficiency improvements. It can be all the sort of things you would expect, the process of handing the claims so that we're not losing any money in the way that the claim is paid.

I mean -- it's -- I think it's a really good number. And you'll see that on top of all the other benefits that Owen talked about in terms of the pricing and underwriting. And that loop of claims to underwriting. If I think back to the inflation challenge that we had. It was the processes that we had in place that we'd invested in, which created the loop of information. I think that's what you're going to see here in Direct Lines. So hopefully, that's a little bit more flavor. Charlotte?

So on reserves, look, as we mentioned at the half year, we didn't observe any issues with Direct Lines reserving. And obviously, we paid the first uplift on the dividend at that point, which should have given you also some comfort in that. Of course, one of the integration activities is to bring alignment with Aviva's accounting and reserving policies. And that's part of determining the acquisition balance sheet.

I would say on that, the work is still ongoing, but we're well progressed across the material components and in particular, on reserving. So all of that work on reserve policy alignment is substantially complete. And to the extent that we have made any adjustments, they are reflected in the Q3 solvency ratio of 177% and you'll see the details on the full acquisition balance sheet when we publish it at the full year-end. And on capital synergies, I mean, essentially, the GBP 500 million is all coming from diversification.

Andrew Baker just behind.

It's Andrew Baker with Goldman Sachs. So first one, Slide 17 to the 7% sort of growth in the underlying business. If we strip out Direct Line from that, I'm guessing the underlying growth sort of at the remaining businesses is probably in the mid-single-digit range. Are you able to give us a sense of which businesses you're expecting to sort of outgrow that number, which businesses are a drag on that number? Just sort of trying to get a sense of the pluses and minuses around that mid-single-digit number?

And then secondly, just in terms of the plan, are you able to give us a sense of the P&C top line and combined ratio assumptions are within your planning assumptions. Again, just trying to get a sense of the conservatism or not within your plan, especially given your track record of beating targets historically.

Do you want to pick up the first and I'll pick up the second.

Yes. So I think what I would say is we're very, very pleased with the EPS development that we can see here, so the 11%. And as I impact before, it's 2 coming from the share count improvement -- share count movement from the buybacks to -- from the cost synergies. I think when we look at the rest, it is a strong track record across all of the business, and it's our opportunity to manage the Group as a whole. Some of it is more top line driven.

So Health and Wealth, some of it is more margin improvement, which we would point to Direct Line and some of the General Insurance businesses. I'm not going to unpack it because part of the beauty of the diversified business is being able to take advantage of tailwinds and not bang our head against headwinds. But I think what you see is driving really high quality growth across those businesses. And it's already coming off a very strong track record of improvement in profitability as well. So I think we always take the right decisions on the portfolio to really keep within the risk parameters that we've set.

Yes. And on the assumptions. So just to reiterate what Charlotte said, we think the targets are ambitious. And we also think that the 11% CAGR is very attractive and hopefully people agree with that. In terms of the assumptions, we've been realistic here. So we've taken into account the soft market in parts of General Insurance, GCS and we've also the difference between the U.K. and Canadian market. So you've got a hard Personal Lines market in Canada, where rates are going up in motor and home by around 11%. And also the fact that we've got a leading position in the SME market in the U.K. and where we're seeing good rate and increase still coming through on that business. So we've taken all of that into account. Also, the -- we set the trajectory based on the spreads and the yield curves as we see them today.

And obviously, we've also got some real positives. If you think about the tailwinds that there are in Workplace and Wealth and Health, then that, I think, is also important to remember, if we think about just a little bit on Workplace, GBP 1 billion of regular contributions inflows coming through every month. It is a train that sort of keeps on growing. Greg and the team have got a fantastic proposition. They're winning over 75% of deals. So there, you're seeing a sort of volume and the sort of margin improvement. So I think we feel that the assumptions are realistic, but ambitious.

Farooq here in the front.

Farooq Hanif from JPMorgan. The first question, adding to that, a lot of your peers have talked about the scale opportunity in Workplace and Wealth, the operating leverage. So I mean, obviously, you're seeing that in your GBP 280 million target. But can we assume that if that accelerates that like your peers, you expect operating leverage to continue? So you add a lot of assets without much cost basically in that business going forward. Because obviously, your target for '26, you've got another 2 years. So it'd be interesting to know about the momentum in that business.

Second question is on the customer opportunity. I mean, you talked about it, I think, very convincingly, you've obviously delivered it in the past, but just in terms of the Direct Line customer base, can you throw out some numbers again in the context of what you said before? About what the opportunity is there?

And the last question is, please don't laugh but M&A again. So I mean, by my calculations, you've got pretty good buildup of cash again. the 10 points of synergies are very, very helpful. It feels like by 2028, you're back to where you were before you did the DLG deal. Has anything changed in terms of M&A? Is it still something that you'll look at, if you see something appropriate or do you think it's kind of done?

Okay. So I'll get Charlotte to talk about the operating leverage because she's got some numbers. But just a little bit on the scale in Wealth. I mean, we have scale in Wealth. We are the biggest platform in Wealth to over GBP 220 billion. And what's really important, I think, is if you look at the component parts of that, the Workplace business and the Platform business are profitable businesses today. And so we get good margins on those businesses. And obviously, scale allows us to benefit from that. It also allows us to invest in both of those things, and there will be a new MyWorkplace app, which will be launched, I think, I'm looking at the team, this week, they are assuming, which will enhance the proposition sort of even further. So very, very excited by that.

Charlotte in terms of the margin.

Yes. I mean the margins that we've thrown out before, and I think all the way back to the In Focus session, we talked about a revenue margin of around 30 bps and an operating margin around 10. I think where we were at the half year, we were still around that 30 points, but there's always pressure on that revenue margin. And therefore, it's really important to be driving the operating leverage. So I think by the half year, actually, we were showing something more like 12 points. So that is everything that we recognize in the IWR business, and it's kind of a material driver of that profit in Wealth and as we continue to build the scale and focus on the costs and how we deliver, then we will kind of keep ahead on the operating margin.

And then, of course, on top of all that you've got then a lot of the flows now really high proportion of the flows going into Aviva Investors, and then there's a small fund management fee that appears on the Aviva Investors side as well. On the customer, there's a lot of customer data. So I mean, I could go for most of the session on this, but I'll just maybe give you some of the headlines. So 22 million customers in the U.K. alone. So one of the largest franchises we've talked about that. So 4 in 10 adults in the U.K. have got a policy with us. If we exclude the acquisition of Direct Line, we have grown our customer base by 2 million over the last 5 years and our multiproduct holdings are up from 4.7 million to 5.48 million to be precise, since 2022.

Some of the key things here, 43% of our new sales come from existing customers over the last year alone, and we've grown the marketable customers by 5%. Now they add on the opportunity with Direct Line, that comes with that. Obviously, Jason reported 4 million new customers. And then the opportunity to overlay, the opportunity to sell more Aviva product, I mean, I think, that's incredibly exciting. But we've also been able to drive a huge improvement in customer experience. So our tNPS is now consistently over 50 and our online experience score is over 70%. And we spoke about the digitization and automation within Direct Line. If we compare Aviva and Direct Line in terms of that customer experience, a lot of the Direct Line demand is still over the phone. It's not digital, it's not automated. So that's cost heavy, if you like.

We've made a real big success of automating and digitizing our customer journeys over the last number of years. So you imagine bringing that, that delivers a better customer experience. So I think the opportunities are really high, and we're very excited about getting on and delivering that. Really key to that, though, without wishing to elaborate too much is having the strategic customer marketing space where we've got all a single view of customers. Also, for many years, insurers have talked or everybody talks about having a single view of a customer we obviously have that. And that is incredibly important at being able to deliver this growth. And that is right across Aviva, not just in General Insurance.

On M&A. Yes, we do build back up the cash. And what we've always said about the capital allocation is, we either return it to shareholders or we invested in -- well in the business. And look, when we think about the business. We've got a big integrations to do. We've made great progress, yes, the performance and we've got to deliver the capital synergies all of next year. We're going to deliver all of the other cost synergies. But please be reassured, we're very ambitious for this business. But we do believe there's plenty of organic growth opportunities that we've already talked about, just some of them today. Remember, this is only like a quick Q3 trading update, I know it feels like a lot more than that. But there's plenty -- there's going to be plenty of opportunities.

Come to Dom in the second row.

Dom O'Mahony, BNP Paribas. Start with Charlotte on capital generation, you very helpfully said we should continue to think about 1 point a month. But then you said for now, I wanted to ask you some, my guess is that number has to go up given the ROE uplift and given that you've -- you're integrating Direct Line, you have the synergies to come, what do you think the run rate capital generation is in percentage points?

Second question is if you think about synergies all in, you've got 275 (Sic) [ GBP 225 million ] on the slide now, given the cost and the claims, how much of that do you anticipate reinvesting into growth into pricing into making sure you're as competitive as possible.

And then the third question is just on the assumptions embedded in the plan. I realize you want to give a bit of the flexibility. But just 2 specifics within that. Reinsurance, so are you assuming that the quota share at under outline lapses? Are you assuming any change to excess of loss? And in particular, what are you thinking about the intangibles, are those being written off? What does that mean for the amortization going through the operating lines? Sorry, I've probably taken more questions that 3 there.

About 5. I think but that's okay.

Yes. So I suppose a couple of things to think about. So on the capital synergies, GBP 500 million, that equates to 10 points of solvency. So that's kind of a stock build, if you like, and that sort of takes the 177% to 187% if we were to do it all now. There's obviously quite a few moving parts. So that's why we were trying to also get you to full year end and thinking through that with a higher level of management actions.

If I do go further forward, there will be other bits and pieces that will move before all of that kind of realization of the synergies. But from the end of '26, we should have brought the stock of solvency above the working range again. And kind of once that's done, we would expect and therefore, the SCR is reduced, we would expect about 20 percentage points of OCG per year going up from there. So if you go back to '24, that was more like 15.

So that's taking into account the regular and then a sort of monthly and then a sort of usual amount of management actions around the GBP 200 million point. So I think we would expect that the capital that we generate will more than cover the uses of capital for dividends and buybacks, et cetera. Obviously, there's market movements and other things to factor in. And we will redo -- we'll give you more up-to-date sensitivities when we publish at the year-end. So hopefully, that answers that.

And on the synergies, so GBP 225 million is the cost synergies and the claims are not included that. So the GBP 225 million is the operating cost number so that you can kind of measure against the '24 baseline. It also doesn't include any accounting stuff. So to the extent that we have, and that was sort of your -- one of your other questions, we've written off about 80% of their intangibles as part of the acquisition balance sheet. That clearly reduces the amortization coming through. However, part of the policy alignment is then look at the level of capitalization of change spend and they were capitalizing a lot, we will capitalize a lot less. So we've kind of given a number of about GBP 50 million on a full year basis for those kind of netting effect. That is not in the GBP 225 million though. That's obviously in the EPS build, but it's not in the GBP 225 million, which is just an operating cost view.

So does that -- to the extent that we're then looking to reinvest that and build that, that I think is kind of part of the normal business planning process. On assumptions, the reinsurance quota share that they had we don't intend to renew. So that's already because of the forward-looking view of the way solvency works, that's already factored into the 177%. So that's kind of that sort of driving a little bit of the SCR development. Is that it? Is that all 6?

Let's go to Larissa.

I'll stick to 3. You had a very interesting slide about the peripheral, so basically non-home and motor opportunities that you see in the U.K. Could you give us a sense of which ones you believe have the most growth potential near term and how fast we can expect that ramp-up to be? While we're on peripheral product lines, Canada had a very good third quarter with no nat cat. But are there any gaps in the product lines that you see there that you would consider filling either and also geographic lines to diversify the exposure there? And would you have a preference for organic or acquisitive?

And then the last one, following up on Dom's question about the 1 percentage point, which was the first question I was going to ask. But you mentioned, as previously guided on the 160% to 180% on the Solvency II target. How should we think about that potentially changing when the Part VII comes through? And also when all of the synergies roll through to management actions by the time that we hit 2028?

Okay. I'll pick up the first and Charlotte will try to pick up the third one. So I think we see we're not going to choose the favorite child. We think that there are growth opportunities both -- well, in all 3 areas of Green Flag, the pet and the micro-SME. The team will know that I've always been a big fan of micro-SME, and it's not something that we really had in our tool kit. And so -- and Direct Line have that and be a really good proposition on landlord and on van. And so we believe that with the really big -- our customer base, the opportunity that we have, MyAviva, et cetera, that there's a really big opportunity there as people choose to self-serve more particularly in that micro-SME range, and there's a lot of small entrepreneurs in the U.K. that have to buy things like D&O, financial lines produce contracts in cancels and things like that. So we think that there's a good opportunity there, and we can bring some real technical expertise to that.

I mean in Green Flag, there's 7% market share and with leading market sentiments. I think there's a Trustpilot score of 4.6% on the Green Flag. So we think that there's a real opportunity, again, here for us to leverage our digital capabilities, but also the integration of that into our claims line and also into Solus. So we think that there -- it's a great business. So we think there's a good opportunity. And then on pet, so the pet market is GBP 1.9 billion as in 2024. Set to grow by GBP 2.3 billion by 2030. So these are all the animals that people bought during COVID and things like that. So there's big opportunity there and Direct Line have been offering pets of 30 years and the business has actually performed well. So strong foundations upon which to build.

And I think, again, we talked about launching an Aviva product with the Aviva brand, our 22 million customers. And again, the digital capabilities on things like MyAviva, we think that there's a real opportunity. So really good opportunities there. On Canada, yes, so Canada have had a really good performance improvement from last year. Obviously, there were a lot of cat events last year. But they've also seen a really strong turnaround in terms of their Personal Lines business, carrying good rate, they've dealt with the sort of theft issues that they were a number of years ago. And I think they've done that well. Obviously, we do have more business in Ontario than the sort of -- some of our competitors. So looking to expand in areas like Quebec, that's certainly something that we're thinking about.

In terms of product lines, it's not so much a product lines point, but we've got 2 really big partnerships, one with RBC and a new partnership with President's Choice. So President's Choice got about 17 million customers in Canada, and we've got that sort of sole tie arrangement with them. So there is a real opportunity for NAV and the team to grow that. And there is an existing book of business as well, which is transferring over, and we're already sort of well into doing that. So the Canadian team are really, really excited about that. So yes, there's opportunity for geographic diversification. But we've also invested in things like our models on exposure management, cat and that sort of thing. So I think the underlying performance should also improve. So yes, we're excited about what Canada is going to do.

So the short answer on the 160% to 180% range is we're still perfectly happy with it and expect to be when the -- all the capital synergies are realized as well. I mean I think in your question, maybe it's just worth kind of going through some of that -- those things that I answered to Dom earlier again. We do expect, whilst until those capital synergies come through, got a higher SCR, so the kind of one -- the 1 point a month, 3 points a quarter for regular is about right. And then you've kind of got the effect of the management actions this year a bit more elevated, but we would always guide to around the 200%.

So kind of once that's complete, it's going to lift in terms of the regular to more like 4 a quarter, so bringing it to 20 in the round for the year. But in practice, it's obviously lumpy quarter-to-quarter depending on things like the amount of BPA we write, what the strain is, the assets we've originated and obviously, seasonality in GI. So we will as I say, the 160%, 180% has been the range for a long time, and we're perfectly happy with it, and we'll be on the other side, too.

We go to Andrew, then Mandeep, then Tom.

It's Andrew Crean for Autonomous. A couple of questions. Firstly, when you first announced Direct Line deal, I think you talked about 10% underlying EPS uplift. Could you give your sense of what that is now is the bigger cost savings? Because when I took a look at your 11% compound growth in EPS. Just if I was to take Direct Line out, what would that be?

And then the second thing is, I noticed you said that the ROE on your General Insurance business is 31% which is higher than the 20%. Given market conditions, you sort of flagged soft market conditions in both U.K. retail and in commercial, what are you expecting the combined ratio to do across your books over the period to 2028?

Okay. Charlotte, do you want to...

Yes. So look, on the first one, we're really focused on the integration and development of the Direct Line business within Personal Lines and therefore, part of the U.K. GI business. And so we're kind of building all of the benefits from integrating Direct Line into the plans that drive towards these new ambitious targets. And that's really the best way of assessing our performance alongside checking on the capital and expense synergies.

The 10% accretion when we announced it back on the 23rd of December, had 3 components to it. So it had the profits from Direct Line coming into the Group. It had the performance improvement that we then expected to realize and it had the benefit of the synergies. Additionally, of course, it was measured at that point in time. So it was incremental to Aviva's outlook and its business plans then kind of at that point in time. So all of that means it's a little bit complicated. But if I do unpick the components, we're very comfortable that the accretion on the deal is better than the original 10% that we originally communicated. But our focus is always going to be on hitting the group targets and the synergy realization that we've talked about.

On the soft market conditions and the combined operating ratio across the book. I mean I think then maybe Charlotte will have a little bit more to add. But we've still got the ambition for the undiscounted COR less than 94%. And I think what you see in the Personal Lines -- in the General Insurance U.K. business today is that we're hitting -- we're sort of below that. And all of our assumptions are on the market, we can see the market stabilizing in Personal Lines, I think, at the moment. But our assumptions are basically on the current market conditions and I think are realistic in terms of what the outlook on that is.

You also have to remember that when we are looking at the mix of business now, we now have different distribution mix because we've got all of the Direct Line business coming in as retail business and therefore, no commission and there is other things coming through on that. So you will see that benefiting the combined operating ratio. I don't know whether there's -- you've got more to add?

No. I mean it's all the same point. And then just the caveat that at the end of the day, though, we optimize for operating profit. Because that aligns to the EPS and the ROE. So depending on market conditions, we would always potentially accept slightly higher COR. But as Amanda said, the distribution mix that's coming from Direct Line is helpful.

Mandeep Jagpal, RBC Capital Markets. Three for me as well. Just firstly, a follow-up question on capital allocation. You spoke about M&A, but given the high cash remittance target, would you consider an escalating share buyback or doing a high to mid-single-digit dividend growth if the cash and balance sheet positions allow?

And then on Workplace. I've spoken about this a bit already, but speculation around tax breaks for contributions being reduced in the upcoming budget. To what extent do your expectations for this business reflect what seemed to be at least in recent year annually recurring disincentives to save into DC pensions.

And then finally, I appreciate it might be a bit soon for this one, but given that you've been busy on DLG. But could you talk about the role of the Life businesses in Aviva going forward? At the lower returns on capital and annuities, in particular, look to be quite competitive, given all the new capital coming in. Would you consider further accelerating the move to capital light by doing something at reinsurance or disposal something similar to your European peers, for example?

Okay. Should I pick up 2 and 3 and you pick up 1 Charlotte?

Yes. I mean I suppose just on -- I think if I understand your question, the cash remittances that we've got coming from the capital generation and our effectiveness of turning that capital generation into cash, which support the dividends and the buybacks. All of that together as part of the capital allocation framework, which is about investing in the business. We never look to hold on to capital that we don't need. So that can consider share buybacks. But what we're doing this year or planning to do is reestablish the regular and sustainable buyback at the kind of affected for the increased share count. So it will be the 300 that we used to have plus the effect of the 14% share count increased to around 350.

As we progress, though, we're always looking at the capital allocation framework in exactly the same way. So everything that we've got is entirely consistent with that. So you should pencil in the regular and sustainable capital returns and you should pencil in the mid-single-digit cash cost of the dividend and that's it.

Which we only set the dividend policy at like [ 18 million ] [indiscernible]. So on workplace. So if we think about what's happened in the market over the last 5 years, you've seen COVID, you've seen the Ukraine war, you've seen the cost of living crisis and yet contributions have completely held up on Workplace. I mean it is just like a train that has fully left the station, not going to stop.

The budget speculation is clearly unhelpful. But I think if we think about also enrollment and if we think about the Workplace business, People will still be saving into pensions, and that regular contribution that we're seeing today will carry on. And so I think that's all to the good. Where we would, I think, say that the government really needs to think carefully is on things like salary sacrifice, not because it will necessarily affect contributions, but it could cost employers more.

And obviously, it could make employees think about how much they may salary sacrifice. And it's not just your mid income earners that salary sacrifice. It is also some of the lower income earners as well. So we would very much encourage that, that is thought through. And even if you use the government's own research, it suggests that 15 million people in the U.K. will not have enough money to retire well.

And the ABI have issued, I think, some data this morning, which is a research, which basically says that people will really -- 40% of people will consider if there are changes to salary sacrifice, how much they salary sacrifice or whether they salary sacrifice at all. So I don't think it significantly changes Aviva. But I mean, I think for the U.K., I don't think that would be -- I don't think that changing things like that on long-term pensions is a very good thing at all.

On the point around the retirement and the sort of interplay between the sort of capital light and capital heavy, I think that we should not underestimate the role that the retirement business plays in Aviva in terms of the capital and cash generation. And I think that the business has done incredibly well. We're seeing really good growth in individual annuities. Clearly, as interest rates reduce, we'll see. I'm pretty sure because of the amount of money tied up in property, an opportunity for equity release will reemerge. But also on bulks, yes, the market is more competitive, but we have written GBP 4.5 billion this year. I think I'm incredibly proud of what the team has done because what they have not done is sacrifice margins for volume because that would be really stupid.

So effectively, what they're writing is that mid-teens IRR. And obviously, the added benefit to that is you're using less capital to write those deals. So I think the team have been very disciplined. They've done a really, really good job. It plays a really important role in terms of that balance of the -- if we get to ['28, ] 75% capital like 25% capital heavy, I think that's about right. And that's really how we think about it as we look forward. But we shouldn't underestimate the competition. You never should. But I think it's all about the discipline. And Doug's -- and I look at Doug and I know that he and Dave have got that firmly in hand.

Tom?

Congratulations, guys. Wow. 11% EPS, I think that's fantastic. And on top of that, it seems there are quite conservative assumptions in there. Can I just ask again on the Personal and Commercial assumptions. How do you see the outlook there for U.K. motor pricing and for U.K. commercial pricing? Because I guess the headline data is a little bit negative at the moment.

The second question is just on Solus and DLG's repair network. I couldn't help but think I wouldn't want to be a competitor against you in that U.K. Personal Lines market. You put a really convincing case there as why you're number one. How much of that repair capacity do you think you own in the U.K. at the moment?

Well, there must be a fair...

Very, very quickly. I haven't done numbers. What was the cash conversion from IFRS earnings to cash before and what is it now? Because it feels like it's gone up to me.

Okay. So on the market data, so let's just sort of break it down. If we think about the U.K. GI Personal Lines motor. So external data is suggesting that the PCW new business pricing is down 10% in the first 9 months of this year. Aviva and Direct Line combined is flat year-to-date, Okay. So we have been less impacted than the market. Also importantly, we have good rate adequacy across the book. Remembering where we've come from over the last number of years. And so when we talk about this business, we are -- the motor business, you hear from Owen this morning, we've got deep technical expertise, and we are basically writing to make sure that we deliver the right return, and we will bring the Direct Line business app to that standard in terms of the underwriting return.

In terms of the way that it's looking in the go forward, I think we would see some sort of stabilization at the moment. And obviously, we know that -- we know what the inflation rate is. So we sort of -- it's less at the end of the day. And so we will be maintaining our discipline there. If we look at home, the external data suggests that the PCW new business pricing is down 12%. If we look at the Aviva and Direct Line combined PCW new business rates, we're up 1%. So again, less impacted than the market. Again, I think we are benefiting there from the discipline, and we're also benefiting in home from the distribution. So if you remember in home, we've got a wide distribution across partnerships, across intermediaries and also across the direct business. So what that does is it protects our position somewhat there.

And just remember, when you're thinking about volumes going forward, obviously, we've got the Direct Line business coming in. We've also won the Nationwide home deal, and that will start to enter into the numbers, I guess, in the first quarter, is that right? In the first quarter of next year. So that is a sizable deal. What you're seeing, I think, is the benefit of scale because it really does matter. And if when you're investing, if you think about your investment in pricing models, in fraud models in all of those things, for Aviva, we are spreading that cost across many products. If you are a monoline player and you're just able to invest that, if we think of a generative AI, that investment that we've made in the claims summarization, we're able to now roll that into travel, into health, into all of the other areas.

If you just invest in and the cost has to be borne by just that 1 product. So I think that is a real advantage of the scale model. So it's about sophisticated pricing, technical expertise and scale. And then if you -- I like the comment on the Solus and the DLG network, that is significant. I mean we recognize the real importance of the owned network, not just in terms of the cost, which is GBP 500 per claim, as Jason said, but also in terms of the turnaround of getting your vehicle back more quickly. And therefore, the customer experience is better. Therefore, customers are happier with Aviva. We have started to take up some of the slack in the repair capacity of Direct Line garages that weren't utilized as highly as the Aviva garages.

In terms of what the actual share, though, I don't know that in terms of what the share of the garage network, but we know that nobody has replicated and it's very, very difficult to replicate what we have. And if you walk into some of these Solus garages, I mean, you literally could eat your food from the floor. I mean it's like so sophisticated in terms of like the equipment and everything else. And by the way, we're rolling out that model in Canada as well.

Charlotte on the cash conversion?

Yes. So cash conversion, I'm actually going to have to ask the team to come back with a precise number for you or even a more specific number for you. But the general capital-light pivot will drive greater alignment between earnings and cash more generally. And kind of I would expect the proportion of payout to reduce over the planned period, but the team can come back to you with some more specifics.

Let's go to William and then James.

William Hawkins from KBW. I hope these 3 are brief. Are there any important changes in strategic asset allocation that you've thought about over the life of these projections?

Secondly, what do you think nonoperating investment variances should be below the operating line in this projection period and 0 or hopefully positive, I don't know, maybe negative.

And then lastly, sorry, you have had a lot of questions on solvency already, but I'm still not quite clear. The assumption about organic growth in the SCR over time. It had been running at GBP 200 million to GBP 300 million before this year and then went very low in the first half. And just not quite clear what you're thinking about change in SCR leaving aside synergies, the organic change.

Okay. I mean no significant changes in the asset allocation. I mean, obviously, as time the book moves over time, the team will, as part of the overall asset liability management strategy, kind of, shift accordingly and look for different opportunities, but no underlying, no big changes in the assumptions here. I think the one point to mention, and I think Amanda mentioned it in her opening remarks is that we are in the process of moving Direct Line assets across to Aviva Investors.

About half of those will be -- that some have already done about half will be moved by the end of the year. And kind of over time, because they were stand-alone, they had a slightly different way of looking at the asset portfolio than we will on a group basis, so we will look to move that, but doesn't have material consequences as a result, but that's important.

And actually, the act of moving to Aviva Investors removes some of the external cost of that and is added to the AUMs in Aviva Investors. In terms of...

It was the nonoperating investment variances.

I mean we don't make -- we build the whole plan on the sort of current market dynamics and the shape of the curve. So as the forward curve has interest rates expected to come down, but that's kind of how we build the plan and then we do sensitivities around that. But there's nothing -- we don't take a view on rates as we bought -- other market assumptions as we build out the plan. So therefore, I don't have a sort of nonoperating variance number to build in. It's assumed to be neutral.

And then what was the last question, sorry?

On the solvency organic growth in the SCR.

So yes, and I suppose thinking about the strain. So I suppose the OCG has been, as you say, about GBP 200 million to GBP 300 million less than the OFG over the last few years. And that's kind of the difference between the business growth and how that drives SCR. The SCR increase this year, we'd expect to be a little bit lower. It reflects the lower volumes of BPAs as well as the fact that the business we've written has been at lower strains than it has historically. But I think the important thing to remember is that and I try to articulate a couple of times as synergies are recognized, we expect this 20 points of OCG, which is including the normal level of management actions to come through, which is -- and to build from there. So that's growing from what was a 15 percentage points back in '24.

James?

It's James Shuck from Citi. Just 3 quick ones left from me, please. Firstly, I think you previously kind of had a kind of target level for central liquidity around the GBP 1 billion level. So obviously a bigger group now. Is the GBP 1 billion still the number to be looking at or is that perhaps a bit higher?

Secondly, perhaps I can ask the CR question in a slightly other way. What's the capital release, the annual capital release from the Heritage book that's running off because presumably some benefit that's reducing the strain within that?

And then finally, just interested in the 4.4 million new customers from Direct Line that you'll get. How much of that -- obviously coming out to renewal and how much -- what kind of renewal rate are you expecting on the 4.4 million?

On the liquidity, I mean, we're comfortable with the GBP 1 billion number even post Direct Line. It is elevated at the moment, partly because we've got the EUR 900 million redemption to pay for over the coming months. So hence, October, it's a bit higher in preparation for that. So -- but no real change on the guidance.

On the SCR, I mean, we don't break that out for Heritage. Again, maybe it's something we can take up with the team afterwards. I don't have that, and we don't break it out usually.

So on the retention rate, we don't -- we're not going to break -- give you out all the retention then we start breaking down all of it for the individual product lines, so we're not going to do that. What we would say is that we would expect the retention rate to be broadly in line with the Aviva retention rates, and we'll very much be driven by the competitiveness in the market, obviously. But we have seen retention fairly steady and in fact, improving, I think, a little bit since the deal completed. And we don't see that there's going to be any issue with the recession. It would all be about the price and the product that we offer to the customers. And we've actually written to all of the customers already to say that we've done the deal. There's been no disruption at all from that.

We're running over slightly but perhaps we can just finish with Abid and then Nasib.

It's Abid Hussain from Panmure Liberum. Just 2 questions I'd be really quick. The first one is on motor insurance pricing over the longer term, so perhaps a more philosophical question. Do you think the consolidation across the motor insurance market helps price rationality across the market or will the underwriting cycle always endure, I know you've already pointed to your pricing being more different moving differently year-to-date than the market. Is there any sort of views that you can share, that would be helpful.

That's the first question. And then the second 1 is on PCWs versus direct distribution being now the #1 player by far, does that change the dynamic for you in terms of direct distribution versus PCWs versus brokers? To me, it feels like you should be able to eke out more margin from PCWs, brokers, partners, if you're putting more volume through for their pipes now. Does your change -- does it change the dynamic or preference is at all for you?

So I think on motor insurance prices, I probably -- I've said what I think where we are now, and we know what the inflation is. In terms of price rationality and consolidation helping. I think consolidation, obviously does help with that and visibility around reporting definitely does help with that. But I think also, you have to look at the different dynamic and of scale. And as I spoke about earlier, your price is a factor of what your expenses are. And if you've got lower expenses and if you've got better pricing models, you're going to be able to deliver a better price. And some of that you'll keep for margin yourself and some of it, you'll play back into the market. I mean that's just trading.

And that's what Owen does probably about like 15 times a day and he's constantly looking at the different dynamics that are going on in the market there. But I think customers will ultimately benefit because they will get a better proposition. It will be -- the service will be better. So the claims will be better. The pricing will be better because we are achieving the benefits of scale. On the different distribution dynamics, look, I think that it's fairly evenly balanced at the moment.

And I think we do a really good job of managing that direct versus PCW versus broker versus partner. I don't see that changing significantly over time. What you will obviously see is the dynamic within the direct line book changing to more PCW as now we have launched on all 4 PCWs within a very short space of time. And as Owen said, we've seen some real positive momentum from that in the early days. Because you've got to be present in order to have the opportunity to win the business, right? If you're present, then you've got a better chance of doing that. So I think that's where you'll see the change.

Amanda, you gave us some good context around pricing versus the market. Can you tell us what's happened to volume as well, policy in force. Second question on capital synergies, GBP 500 million by 2026. I know that's all fungible. But if you reinsure 50% of that like you do for the GI book, that's GBP 250 million. Does that go into the GBP 350 million buyback? Or is that should we expect a special return in 2026?

And then final question on Slide 17. If I take the GBP 225 million cost savings, divided by the GBP 2.2 billion, I get 10%, you're putting 2% per year over the next 3, that's 6%. So what's the delta?

Okay. So on the PIF, I think I would say -- I'm probably repeating myself. Our absolute priority is to get the performance of the Direct Line brands to the same level as the Aviva retail brands. So that's our performance. We're not motivated by the number of policies in force and motivated by profit that we're going to make, and that is the way that we think about it. On saying that, we have seen, as Owen said, some green shoots in terms of the policies in force, following the -- going on to the price comparison website.

So I think that's early signs of positivity there. But I will never be managing this business, and I can tell you that for every line of business, it's not just for motor, we do not manage on policy count we will manage on profit. And you've seen that whether it's in bulk or in home or in motor. That's the way that we think about it.

On the -- on your second point around the more capital and special returns and dollar. Do you want to take that?

Yes. So look, realizing the capital synergies is really important and it helps us get the solvency ratio to be above the top end of the working range. Then essentially, the uses of capital will be determined in the usual way on the capital allocation framework. So we have 3 main uses of capital to make sure that we are able to meet the dividends to -- which is essentially supported by the cash remittances, investing in the business and returning the capital to shareholders. So we'll have optionality, but we'll deal with it in that normal way. And what was the other question?

The GBP 225 million, so earnings are growing each year, and we're talking about a compounded growth rate. But the GBP 225 million is kind of driving the 2 points in the cost synergies, the share count, the 2 points. And so everything else is coming from building the earnings, which is growing each year. But it's a compounded. Let's take it offline at the end.

Okay. I think that's it. okay. So there's a lot of questions there. A lot of people in the audience as well. So a huge amount to unpack. We know we've delivered a lot of detail today. The team are around to answer any follow-up questions like the last one. Thank you very much.