London, Jan 29, 2026, 09:43 GMT — Regular session
Aviva shares edged up around 0.5% to 637.8 pence in early London trading on Thursday, while the FTSE 100 climbed roughly 0.6%. Legal & General held steady, and Phoenix Group gained about 0.1%, according to Google Finance data. (Google)
Rates are the key factor here. UK life insurers typically track gilts — British government bonds — since yield changes affect both investment returns and capital buffers. Ten-year gilt yields reached their highest level since Nov. 20, hitting 4.569% at 0831 GMT. Futures markets show only limited rate cuts expected this year, with a quarter-point reduction not fully priced in until July. (London South East)
Inflation data is getting a tweak in the UK. Starting February, the Office for National Statistics will use supermarket checkout “scanner” data. Tests indicate this shift could reduce the average CPI by about 0.03 percentage points over several years. “The price charged at the till, not the price shown on the shelf, will feed into our inflation statistics,” said ONS Deputy Director Mike Hardie. (Reuters)
Overnight, the Federal Reserve kept the fed funds rate steady between 3.5% and 3.75%, flagging inflation as still “somewhat elevated.” The hold sent bond markets up. “The Fed did nothing and did it with conviction,” Karl Schamotta, chief market strategist at Corpay, told Reuters. (Reuters)
There was some company-level chatter, though nothing directly tied to Aviva’s balance sheet. Aviva Investors revealed its latest Private Markets Study, showing average allocations to private markets climbed to 12.5% of portfolios. The survey covered 500 institutional investors managing $6.5 trillion in assets. David Hedalen, head of private markets research at Aviva Investors, noted that “for many investors, private markets offer an attractive illiquidity premium” alongside diversification. (Aviva Investors)
Aviva plc’s next major milestone is its earnings release. The insurer will unveil full-year results on March 5 at 0700 GMT, with an analyst and investor presentation scheduled for later that morning, per its financial calendar. (Aviva)
Investors are zeroing in on how much of the rate shift translates into cash generation and the implications for capital returns. The solvency ratio — a regulator-mandated gauge of capital health — remains crucial, as it directly affects dividend and buyback potential for UK insurers.
Aviva announced earlier that the UK’s Prudential Regulation Authority has greenlit a tweak to Direct Line’s Solvency II capital model (the framework insurers use to calculate capital requirements). The insurer said it expects “a further update” with its full-year results. It also confirmed it remains “on track” to achieve over £0.5 billion in total capital synergies by around the end of 2026. (Investegate)
The risk is clear-cut. Should gilt yields drop sharply or rate-cut expectations accelerate beyond what investors anticipate, the sector could lose backing fast. For Aviva, any slip in capital assumptions or missteps in hitting integration and synergy goals would probably surface first in the solvency figures.
