London, Jan 27, 2026, 09:31 GMT — Regular session
- Aviva shares edged up roughly 0.7% in early London trading.
- UBS stuck with Aviva as its top UK life insurer choice, maintaining a 750p price target.
- All eyes turn to Aviva’s full-year results, set for March 5.
Aviva shares climbed 0.7% to 629.2 pence during early London trading on Tuesday, building on a modest bounce from yesterday’s close. (London South East)
The FTSE 100 kicked off higher, led by gains in financial stocks. Brokers highlighted life insurers for their dividend potential and capital returns ahead of earnings reports. (MarketScreener)
Aviva will release its full-year 2025 results on March 5. Investors are focused on any updates regarding distributions and capital measures following a turbulent opening to the year for UK financial stocks. (Aviva)
UBS analyst Nasib Ahmed said Monday that Aviva remains a favorite thanks to its “well-protected balance sheet” and “high capital generation yield and diversification.” At the same time, he flagged Legal & General’s “high sensitivities to a market downturn.” UBS set a 750p price target on Aviva and held Legal & General at neutral, according to the note. (Proactiveinvestors UK)
The term “capital generation yield” refers to the excess capital an insurer generates compared to its market value — essentially, the cash available for dividends, buybacks, or shoring up the balance sheet. UBS estimated Aviva’s operating capital generation yield at roughly 12% in 2027, with a payout ratio near 75%. By comparison, Legal & General’s figures stood at about 10% yield and close to 100% payout, according to the note.
Aviva ended Monday at 624.8 pence and on Tuesday has fluctuated between 624.4 and 630.4 pence, per market data. Its 52-week span stretches from about 485.9 up to 700.8 pence. (Google)
UBS also expressed a preference for Phoenix instead of Legal & General, calling M&G fairly valued but noting its “relatively high market sensitivities.” This highlights a well-known sector trade-off: choosing between income and buybacks versus vulnerability to market fluctuations.
But those cushions can erode quickly during a sharp selloff. If credit spreads widen, equity markets falter, or underwriting results take an unexpected hit, solvency ratios—the regulatory gauge of an insurer’s capital buffer—could come under pressure, making it tougher to justify payouts.
Analysts tracking Aviva are focusing on its general insurance results and what UBS refers to as “management actions”—moves like adjusting investments, reinsurance, or pricing strategies that insurers use to safeguard capital during market stress.
Aviva’s results on March 5 will be the next key trigger. Investors will focus on any shifts in the dividend forecast and whether there’s talk of additional capital returns outside the usual payout schedule.
