Aviva plc (AV) Earnings Call Transcript

Good morning, everyone. Thank you for joining us for our half year results presentation. It's great to be back at 80 Fenchurch Street in our new events space. As always, I'll open with an update on our performance and our strategic progress before handing over to Charlotte, who will take you through the results in more detail, and we'll finish with the opportunity for questions. So let me start with the key messages. Aviva has delivered an outstanding performance in the first half of 2025, extending our track record of delivery. We are moving at speed on the integration of Direct Line, which is critical for our ambitions. And we continue to make excellent strategic progress. All of this shows just how strongly we are pushing Aviva forward. And of course, there are many more opportunities to go after. Everything that we have delivered is ultimately down to our fantastic people. So I want to take a moment to thank everyone at Aviva. Their dedication and relentless focus on delivering great customer outcomes is the driving force behind today's results. And with our new Direct Line colleagues, we will be able to achieve even more together. So let's get into the numbers. As you can see, we've had a very strong first half. Operating profit is up 22%, with operating EPS up an impressive 25%. And we continue to grow capital and cash generation. And for shareholders, today, we are announcing an interim dividend of 13.1p per share, up 10% year-on-year. This includes the additional uplift that we promised upon completion of Direct Line, and Charlotte will cover this in more detail later. Underpinning these results is continued delivery right across our businesses. In General Insurance, we've had a very strong 6 months across the U.K., Ireland and Canada. Operating profit is up almost 30%, and premiums are up 7%. In Wealth, we extended our #1 position now with nearly GBP 210 billion of assets, and we continue to grow. Net flows are up 16% year-on-year, an impressive 6% of opening assets. And we capture around 65% of workplace flows into Aviva Investments. In Protection, we're improving margins as we integrate business from AIG. In health, we've grown by 14%, reaching GBP 1 billion of in-force premiums with a low 90s combined ratio. In retirement, we've written GBP 2 billion worth of bulk annuities at attractive margins, supported by real asset origination in Aviva Investors in what is a competitive market. And finally, across all of our businesses, I'm particularly proud of the progress that we are making for our customers. A record 5.5 million customers have two or more policies with us. And our Net Promoter Score is now over 50, which is up more than 15% year-on-year. Now let me touch on the acquisition of Direct Line. We completed on the 1st of July, only six months after our recommended offer. The integration is underway, and we are moving at speed. Aviva is now in control. New leadership has been put in place and customer service hasn't missed a beat. And of course, we're focused on improving performance and driving financial benefits. In fact, we've already implemented the first of the functional changes. So we see plenty of opportunities, and we are as pleased with the deal as when we announced it back in December. With our track record in Personal Lines, we have real confidence that we'll unlock the full potential of the combined business. And to celebrate and recognize the acquisition, everyone at Aviva, including our new Direct Line colleagues, will receive GBP 500 worth of free shares this September. But today is all about Aviva's half year results. And we will share more on the detail on the integration and what it means for our ambitions at Q3 results on the 13th of November. So moving now to our excellent strategic progress. We have the right strategy and it's delivering results. We are focused on executing across our four priorities: growth, customer, efficiency and sustainability. And with the red line, we will be able to go even further. So let's take a look at these priorities in a bit more detail, starting with growth. As you know, a core element of our strategy is to shift our earnings mix towards capital light. The benefits of this are clear. We're delivering stronger growth and better returns using less capital, which is a win for our shareholders. Less than three years ago, our portfolio was evenly split. Today, we are 66% capital-light, and we are on track to push that past 70% with Direct Line. And the complementary nature of our businesses is a unique advantage of Aviva's diversified model. It means that we are not reliant on just one market or product, which helps manage risk, creates more opportunity for growth and benefits customers across all of their needs. We will continue to deliver disciplined growth in retirement, too, driving capital and cash generation and supporting our dividend. Importantly, we see no shortage of growth opportunities across all of our capital-light businesses, and we have very clear plans to go after them. So let me bring this to life. We have a huge opportunity in wealth with GBP 2.3 trillion of assets in the market, growing at double digits. Doug and the team are taking the business from strength to strength, almost doubling assets over the last five years as we scale and connect our offerings across Workplace, Adviser Platform, Succession Wealth and now Direct Wealth. And we also have the benefit of having leading multi-asset funds in Aviva Investors. So we are on track for GBP 280 million wealth profit by 2027. And with over 5 million wealth customers and our full range of products, we are uniquely positioned for further opportunities that come with the pensions bill and targeted support. Similarly, in health, we're on track for GBP 100 million profit by 2026, benefiting from market-leading propositions, disciplined pricing and supply chain management. In U.K. General Insurance, Jason and the team are now building on our #1 position in personal lines as well as leveraging new partnerships in travel and home with Nationwide. And we're extending our leadership in commercial lines. In Canada, Nav and the team are strengthening personal lines. We've launched our new partnership with the financial arm of Loblaws, Canada's biggest supermarket chain. This gives us direct access to 17 million of their loyalty program members. Finally, in Global Corporate & Specialty, we're building on our strong presence either side of the Atlantic and through Lloyd's. We're already seeing real potential with seven new lines of business in Lloyd's and broader client appeal, including our largest ever GCS account win in Q1 this year. Now moving to customer. This is a key source of competitive advantage. With the red line, we've surpassed 25 million customers globally. And in the U.K. alone, we now have over 21 million customers, giving us one of the largest franchises in U.K. financial services, bigger than most major banks. And in fact, around 4 in 10 adults have a policy with us. This scale gives us a significant growth opportunity that Aviva is uniquely positioned to unlock. We offer a full range of products to support customers throughout their lives. We're a trusted brand and our digital experience keeps people engaged. And as you heard from Charlotte at the in-focus session last year, we now have the right data and marketing capabilities to bring all of this together. So we continue to push on three focus areas to unlock our customer advantage. We've grown our customer base over the last five years, 2 million more customers have turned to Aviva to protect their future. We're serving more of their needs. By unlocking permissions, we are now able to directly engage with over 9 million customers. That's 4 million higher than 2020 and a big reason why 42% of our sales are to existing customers. We've made big improvements to customer experience. By bringing together all of the customer data into a single view, we can now offer more personalized interactions through MyAviva and it's paying off. Our online experience score is now over 70%, up by 16 percentage points since 2023. And now we have a big opportunity to bring the best of Aviva's experience to over 4 million Direct Line customers that we just welcomed. Turning now to efficiency. This is always a top priority for us. We are driving benefits through major transformation programs across the group, simplifying our IT estate and building enterprise capabilities. Artificial intelligence is helping us to move faster. We have been using traditional AI for almost a decade, and we're now extending into generative and agentic AI. And because we have so many customers, real breadth of data and strong product expertise, we're in a great position to get even more value from AI than most. So a brilliant example here is our claims transformation in U.K. General Insurance, where the team has delivered GBP 80 million of run rate indemnity savings. They've implemented best-in-class fraud detection with 12 AI-driven models. They've reduced the time that customers are on hold by 50%, and they have improved repair times and customer experience through our Solus network. This is a win-win for Aviva, but also for our customers. And we will, of course, now bring these capabilities to Direct Line. Finally, on sustainability. We're delivering across both climate and social action. Our investment in the U.K. is a testament to our commitment here. So this includes plans to create a world-leading cancer center in London, building over 1,000 new homes in Norwich City Center and continuing to support high-growth U.K. start-ups, which are the lifeblood of the U.K. economy. So a great story with real action across all of our businesses. And if you ask me what's behind our continued success, it is, of course, our fantastic people. Today, our colleagues are more engaged than ever. United behind our strategy is when Aviva and willing to go the extra mile for customers. They really make the difference. This year, we will launch a new program called leading the way, developing Aviva leaders for the next 30 years and beyond. I want Aviva to be the place that develops and attracts the very best leaders, the place that makes a lasting impression on current and future generations of leadership from those managing customer-facing teams all the way through to our most senior business leaders. And this will, of course, include our new Direct Life colleagues. So we've made a lot of progress. We are the U.K.'s leading diversified insurer. We are accelerating in capital light. We have a clear customer-centric strategy and a reputation for delivery. And we are further enhancing shareholder returns as a result of the Direct Line acquisition. And that's exactly why we believe that Aviva is a great investment. So that's a high-level view. I'm now going to hand over to Charlotte, who's going to take you through the results in more detail.

Thanks, Amanda, and good morning, everyone. I'm delighted to be here to discuss yet another set of great results. As Amanda said, the first half of 2025 has been a particularly strong half for Aviva. We are continuing to build on our track record of growth momentum and increasing profits. Operating profit is up 22% to GBP 1.1 billion. Operating capital generation of GBP 957 million was up 33% and own funds generation of GBP 909 million was up 20%. This translated to an improved ROE of 16.7%, up 4.3 points as well as growing cash remittances of over GBP 1 billion, up 7%. Now this is in addition to the remittances brought up for the Direct Line transaction, which were reported outside of normal cash remittances. The solvency cover ratio remains strong at 206%, increasing by 3 points since the beginning of the year. And trading in the business units has also been very strong. Group GI premiums were up 7% in constant currency, while the undiscounted COR of 94.6% has improved by 0.8 points. In IWR, total sales increased by 9%, while wealth net flows of GBP 5.8 billion represented 6% of opening AUM again. I'll now start my run-through of the businesses by looking at General Insurance across the group. In the last few years, we've delivered impressive premium growth with a 9% annual growth rate. And over the same period, we've achieved margin expansion from a 2-point improvement in the underlying combined ratio. In the high interest rate environment and as we continue to grow the book of business, investment returns are higher as well. Combined, they supported a material uplift to operating profit, which has now reached GBP 648 million for the group. And impressively, GI profits now represent over half of the business unit operating profit. I'll now unpack these details in a bit more detail -- sorry, in a bit more detail, starting with the GI businesses, starting with U.K. and Ireland, sorry. So U.K. and Ireland. Premiums in U.K. and Ireland increased by 9% to GBP 4.1 billion. U.K. Personal Lines premiums grew 3%, a good performance navigating the softer market conditions in motor and home. And we've successfully prioritized strong pricing adequacy in the book over the past few years, and this focus continues. Commercial Lines premiums grew 15%, benefiting from rate actions in SME, new business growth in GCS and the addition of Probitas, which wrote GBP 180 million of premiums. The U.K.'s COR was 93.7%, reflecting lower frequency, reduced claims costs and some favorable prior year development. Including Ireland, which was impacted by Storm Éowyn in Q1, the UK&I undiscounted COR was 4.5%, a 1.3 point improvement. And all of this translates to a 50% increase in operating profit to GBP 430 million. We expect another strong performance for the division in the second half with some moderation to the level of profitability given the rating environment and with the favorable prior year development observed in the first half, not necessarily repeating in the second. Premiums in Canada were up 4% in constant currency. Within this, Personal Lines grew 9%. And Personal Lines benefited from strong pricing actions, which included double-digit pricing increases across auto and property lines. In Commercial Lines, we have remained disciplined and taken profitability actions in parts of the portfolio. We continue to add rate but have written lower volume in GCS as we have maintained focus on margins over volume. And the underlying COR was 4 points better, a really impressive improvement. And we've been working hard to achieve pricing actions that are earning through and are seeing reduced claims frequency and improvement in auto theft experience. undiscounted COR of 94.7% was consistent year-on-year as adverse weather was offset by more favorable prior year development. Operating profit was up 7% in constant currency. Now let's move to IWR by looking at the business as a whole to start with. Operating profit continues to grow consistently with strength across health, protection and wealth, offsetting the runoff in Heritage. We are growing our store of future profits on the balance sheet in the contractual service margin known as CSM. Now releases from the CSM continue to increase and are the most material contributor of operating profits for annuities, protection and Heritage. At the same time, due to the growing business, the CSM has increased 6% over the last 12 months to GBP 7.8 billion after taking into account the releases. This is building value and will deliver greater operating profit in the future. And lastly, and as you probably remember, the accounting rules of IFRS 17 mean that the CSM doesn't include the future value of our wealth and health businesses, which are increasingly important parts of our future profitability. Focusing now on Protection & Health. Although Protection sales of GBP 172 million were lower, the volumes in the second quarter of the prior year were elevated before the overlapping propositions of AIG were consolidated in August 2024. Importantly, we've seen good increases in the business margins as we repriced in line with our plans and the integration is going really well. Retention levels are ahead of expectation and expense and capital synergies in line with our plans. Protection operating profit was up 23%, supported by a higher release from a growing CSM. And in Health, we continue to grow strongly with in-force premiums up 14%. Operating profit supported by a low 90s COR was up 26% to GBP 29 million. And we continue to invest in this business and are on track to meet our ambition for GBP 100 million of operating profit by 2026. Now let's go to Wealth, where we are the largest player in the U.K. and have reached almost GBP 210 billion of assets under management. Net flows increased by an excellent 16% to GBP 5.8 billion. Workplace net flows were 8% higher as we continue to see growth in member contributions and inflows from the onboarding of new schemes. And as I said at Q1, we are now achieving GBP 1 billion of regular contributions and flows each month, demonstrating the real power of the business. Adviser platforms net flows increased 22%. And in May, we launched our new onshore bond product. This gives advisers more options for tax-efficient investing and inheritance tax planning. We are also making continued progress in developing our direct business, where the operating performance improved by GBP 7 million. And we continue to invest in our wealth proposition given the significant growth opportunity. Operating profit was up 31% to GBP 76 million in the first half, supported by an improved operating margin. And we remain on track to meet our ambition of GBP 280 million of operating profit in 2027. And our expectations beyond this point are even more exciting as we continue to grow assets and revenues and as future benefits of operating leverage emerge. The last segment to cover is retirement, where sales were GBP 2.9 billion. This included GBP 2 billion of BPA business written at comparatively low new business strain. We held our discipline in a market that was increasingly competitive in the first half of the year. Trading has been positive since the end of June, volumes now up to GBP 3.1 billion. And we continue to be active in this important cash-generative business, but are selective. Our focus is on writing business that generates high IRRs above our low teen hurdle, and I'm confident we'll be able to continue doing this. On the individual annuity side, sales were up 29% in a growing market and following the investment we have made to increase operational capacity. We've also just launched a new guaranteed fixed term product, adding to our suite of retirement options for Aviva and open market customers. And along with equity release, there's a lot of potential in consumer retirement market, an area where we know our brand plays really well. And the changes made to the inheritance tax in last year's budget may increase consumer interest in this area. Retirement operating profit was 3% lower due to reduced investment returns, which offset the benefits from portfolio growth and higher releases of the CSM. So that covers the details of the businesses. Now this is a slide I come back to each time as it sets out our framework for capital allocation and performance management. It sums up the focus we have on driving performance underpinned by financial strength and how this, in turn, allows us to allocate capital, whether through our commitments on the dividend, our investment in the future or our returns of capital to shareholders. We are continuing to invest in our business to support growth and efficiency. Our general insurance distribution ratio has improved over the last two years, benefiting from our efficiency efforts and shift in business mix. Now half year 2025, we saw a small increase, which was impacted by the initial costs from distribution agreements such as Nationwide and the inclusion of Probitas. This has resulted in a temporary uplift in the ratio. In IWR, the efficiency ratio has remained relatively steady. The investments we are making in the wealth, health and individual annuities will drive longer-term growth and efficiency. And the benefits from these investments will continue to emerge over time. Aviva Investors has improved its cost/income ratio by 9 points over the last 2 years, reflecting strong cost discipline. In the last year, we have seen a 2-point improvement as revenues have grown while costs have been held flat. And now that Aviva Investors has a scalable operating model, as we grow revenues further in the future, the benefits of this scalability will emerge quickly in the bottom line. Our solvency remains strong. As at the end of June, it was 206%, up 3 points since last year. We saw strong operating capital generation in the first half and benefited from 5 points of debt actions, partly offset by market movements in the period. Our shareholder asset portfolio continues to perform well and center liquidity is comfortably above appetite at GBP 2.1 billion at the end of July. Leverage is slightly elevated at the moment as expected, having issued some euro-denominated Tier 2 debt, which is available both for normal corporate purposes as well as getting ahead of refinancing needs. Now this brings me to the acquisition of Direct Line, where we were very happy to complete on the 1st of July. We continue to expect solvency to be towards the top end of the group working range when we report on a combined basis at Q3. And we expect material increases to the solvency ratio over time as we realize the material capital synergies from the acquisition. Additionally, we recently announced that the Direct Line's GBP 260 million of Tier 2 debt notes -- Tier 2 notes have been approved for inclusion in our group solvency. And while leverage is expected to remain above 30% for a period, we have a range of actions available to return it below this level in the medium term. And as a reminder, we funded the deal with GBP 1.7 billion of cash from across the group. So we'll no longer earn interest on those funds going forward. Now a few words about Direct Line's performance in the first half, ahead of the acquisition. So while Direct Line won't be producing a set of accounts for the first half, we wanted to give you some color on the business' performance. And to be really clear, the numbers I refer to here are produced on direct lines basis with no adjustment to align it to Aviva's accounting policies. And these numbers are not consolidated in Aviva's results today. So premiums were flat, while policies in force were 5% lower as the business focused on margin over volume, partly offset by better performance on the Motability contract. The decline in policies in force in the first half was in line with our expectation, and it is positive that net insurance margin, Direct Lines measure of underwriting profitability is beginning to make good progress. NIM was 9.4%, an improvement of 7.6 points on half year '24. So the integration of Direct Line has started in earnest and our pre-ownership models and plans are, of course, being further developed now that we have full access to information. So far, all this hard work gives confidence that we will deliver the improvements required to realize the value of the acquisition. And we're really looking forward to coming back to you in November with a lot more detail. This brings me on to the dividend, which has been increased by 10% to 13.1p. Now in line with our guidance back in December, we've raised the dividend by the usual 5% and an additional 5% following the completion of the transaction. And we expect to resume buybacks in 2026, increased to reflect the higher share count, which has grown by 14%. So we remain confident in the outlook for the group in 2025 and beyond. And on a stand-alone basis, are well on track to meet our 2026 group targets. Recognizing the impact of the Direct Line transaction, we will provide an update on group targets alongside our Q3 results on the 13th of November. Performance has been strong in the first half. And in terms of outlook for the second half, we will remain disciplined across our General Insurance business and expect to see continued momentum in the capital-light health and wealth businesses. Additionally, while the numbers have benefited from management actions taken in the first half, which is not always the case, we still expect further management actions to come through in the second half. And as I know you expect of us as a management team, we continually apply our performance management and the capital allocation framework across the businesses to drive decision-making. This means we trade with discipline in more difficult market conditions and focus where there are growth opportunities to drive optimal results from our diversified business model now and in the future. The group is really well positioned. This is an exciting time for Aviva, and we're really looking forward to the next phase of growth. And with that, back to you, Amanda.

So thanks, Charlotte. So before we turn to Q&A, let me just take a moment to bring all of this together. Over the past five years as CEO, I have had the real privilege of leading Aviva through a period of profound transformation. It's been a journey of focus, resilience and growth, driven by our people, our strategy and our unwavering commitment to customers. Today, 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. But we know there is still huge opportunity. And as ever, we are focused on accelerating capital light, unlocking customer advantage and delivering our shareholder promises. So there's a lot to be excited about. And Charlotte and I look forward to coming back at Q3 results with an update on the Direct Line integration and our future ambitions. Thank you for listening. I'm sure there will be lots of questions. So we'll now move over to Q&A.

[Operator Instructions]

Thank you for let me be the first Andrew of the day. So I guess on general insurance, are you just able to give an overview of pricing versus claims inflation trends that you're seeing in personal and commercial lines by U.K. and Canada? And then on the management actions, so these were clearly sort of above the run rate in the first half. You've signaled to still expect some in the second half. I appreciate they're lumpy, but was there any thought on upgrading the sort of GBP 200 million guidance, I'm thinking more next year and beyond? And then finally, I guess, in November and the update to group targets, are we -- should we be expecting sort of current targets, but just overlaying direct line on top of that? Or should we be expecting new metrics?

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

Yes.

So on the GI pricing. So what we're seeing is that inflation is sort of mid-single digits across motor and slightly more -- a little bit more on home. And you'll have seen the most recent Pearson Ham data, which just to remind you, so that is just a price comparison website data. And I think that was showing a 7.5% motor rate reduction to the half year. If we look at Aviva's experience comparably on PCW, it's actually minus 3%. So I think what you see is that we're applying real discipline there. And I think if we think about where that was because I think sometimes we forget what was happening in 2023, the PCW rating increases there were around -- on new business of 47%. So the way that we look at this is that there is really strong pricing adequacy within the book. We're writing at good risk we are looking at our own pricing action to make sure that we maintain discipline in this market. If you remember when we reported at Q1, we said that our new business rates were minus 4%. They're now minus 3%. So you've seen that happening. And I think the important thing here is when we look across motor, we've obviously got other distribution channels as well. It's not just the price comparison website. It's our pure direct channel, our intermediated channel. And we've been able to, therefore, balance that discipline across -- did you ask about home as well, Andrew? Just on home. So there, the Pearson Ham data is showing rates -- new business rates down by 7%. For us, that's flat. So I think what you're seeing here is that we are able to be very disciplined, and that is obviously putting us in a more confident position. Charlotte, on management...

As you say, we typically guide to management actions of around GBP 200 million, and that's in the Solvency II OFG metric predominantly. And historically, they've been more sort of clustered in the second half, but we have sometimes seen management actions arise at other times of the year. And that's the case this half, and I think probably going forward, a little bit more likely. I think as we go forward in the second half, I would expect us to continue to work the balance sheet and see some more management actions. But guidance is GBP 200 million per year, recognizing that they can be lumpy. So sometimes they'll be a bit higher, sometimes they'll be a bit lower. I think they were a bit lower last year. So probably this year, they'll be a bit higher. But it's too early to quantify, and I really wouldn't change your guidance up from GBP 200 million going forward.

On the target, so obviously, we're very focused on delivering our existing targets, which we set last year, and we do remain on track, and you can see we're making really good progress against that. So the business obviously now being majority capital-light. We've spoken about this before. We definitely do see ourselves more in line with the European multiliners. And so we are going to consider what the right targets are for Aviva as we move forward. And I'm not going to front run what those are today. And as Charlotte said, we'll come back in November with more detail on that.

Andy Sinclair of BofA. First on direct line, I know you won't be able to see too much, but just on reserves, if you can say any comments on what you've seen in terms of reserve adequacy direct line since you've taken the keys. Second was just on the reserve releases, very nice coming through today. But I know you said maybe less in H2, but just any kind of updated comments on PYD going forward, strength of reserves, kind of anything you can comment there? And third was just on retirement, actually, competitive backdrop today, anything that you can talk about there? And I know you said it's a nice area to write margins at times, but it's probably not as core -- sorry, Dave, if he's in the room, not as core for you guys perhaps as some other peers who are very focused on BPA. What do you need to still be excited about this area? Is that an area you still want to be pushing for new business with the competition landscape perhaps change a bit.

Charlotte, you'll take the first two, Charlotte. I can take the second. I think, look, I'm not really going to comment, as you'd expect, on Direct Line. We've reported a NIM number, and we've had the since the beginning of July. And so we've had an opportunity to reflect. But the opening balance sheet is still to come where all the policies will be aligned and we'll kind of bring things on to an Aviva basis. So probably nothing more to say on that. And then in terms of the prior year development, yes, it was favorable, 2.6 points favorable and it's favorable both in the U.K. and in Canada. In the U.K., it's kind of some positive commercial lines property experience, development in large claims, both in GCS and in SME. And in Canada, some beneficial development in Ontario, both in personal auto and personal -- sorry, and commercial property. So it's kind of just items that are developing more positively than the reserves. So I would say, as I always say, we reserve the best estimate. So there's no expectation of PYD being positive or negative. Hence, I'd be cautious about assuming that this positive trend continues because it is just at a point in time. So that's all I can say.

And I think there were two parts to your target question. I think it was around confidence in the target in relation specifically to what we're seeing in the bulk market. I think, first of all, we've shown how confident we are, I think, in the targets you see in today's numbers that we have real confidence in those targets. And the reason why we are confident in that is what we've always said boringly that this is a very diversified business. And what you're seeing here is really strong growth in the capital-light businesses. And I don't -- and by growth, I mean profit growth. I think it's brilliant to do the volume growth, and I think we've done that, too. But I think it is all about how you deliver that profitably. And we've seen the wealth business grow profitably, the health business grow profitably, Protection is growing profitably and also the general insurance business. So that's for us is one part of the business. Clearly, we have already got a scaled position in bulks and an important book of business there, and you saw very strong growth in individual annuities 29%, so a big performance. But on the new competitors and the trade environment, we will continue to be disciplined. And I think I don't think this is any different to what I've said for the last three years when we've been asked about B. It is one part of our portfolio. I think Doug and the team have done a brilliant job in terms of the deals that we've written so far, the IRRs that we've written those deals at and the margins are strong. We've got a strong pipeline. We're in a good position today, GBP 3.1 billion as we stand up here. Mark and the team have been able to source assets as well, GBP 1.3 billion so far this year. But we will just be -- we will remain disciplined. We still, though, remain on track for our GBP 15 billion to GBP 20 billion across 2025 to 2027, which is an ambition, not a target that we talked about last year.

Nasib Ahmed from UBS. So a quick follow-up on Andy's question there on PYD. If I take that out from your 1H numbers, you're at about GBP 500 million for General Insurance combined. And then you talk about softening pricing as well. So can I get some kind of guidance on second half earnings for General Insurance? Is it -- should we think about lower than GBP 500 million? Second question on Workplace. Can you give an update on kind of what is the earning power of the GBP 1 billion per month that you're getting in? I remember from the In focus Day, you had 10 basis points of margin on admin. How much are you earning on Aviva investors welfare kind of the all-in revenue margin that you're earning on the GBP 1 billion that you're getting every year? And then finally, on India and China, we don't talk about that at all. Again, what does that business give you? Chinese and India markets are up quite a lot. When do you think about disposing those businesses off.

Okay. Charlotte, do you want to pick up one and three?

Yes. So look, I think the way I think about the General Insurance business and the profitability to be at the point where it's half the operating profit for the group is amazing. I think, yes, we saw some PYD and weather. But across the group, they're largely offset. So the group COR was 94.6%. The underlying COR 95.9%, and that's 0.9% better than the first half. I think what I showed on my early slide was that improvement in the underlying COR by about 2 points over the last few years. And we saw real improvement in Canada this time, 4 points improvement there. the U.K. COR was relatively stable. So it was about 0.7 adverse, but very much in the same. I think it's important to think of the power of the business, maintaining that strong rate adequacy we've built, prioritizing the underwriting discipline and trading well. And so we look to optimize that operating profit and do so at high-quality cores. So if I think of the outlook for the rest of the year, yes, it is a softer market environment, but we've got that really good pricing adequacy trading through. We've got a really solid investment portfolio -- so I still see good profitability in the second half of the year. I'm not going to give you a specific number, but I think all times positive on the way we trade and the discipline across the portfolio.

On the Workplace, so if you remember when Doug stood up and talked about this a couple of years ago, he talked about effectively the driver of the workplace profitability, the GBP 280 million operating profit coming from -- sorry, wealth ambition coming from Workplace and the Adviser platform. And we already have the scale. So I think we're very confident about the ability to grow. And we unpacked it and you're right about it was a revenue margin was 30 bps and the operating margin was 10 bps. So I think the operating margin has seen a small improvement since then. And that relates to the administration fees that we recognize through the IWR business, which is the most material component of the profit from the Workplace business. You also call out that a significant proportion of the flows going into Aviva Investor Solutions from which we earn the fund management fees. So there is additional revenue and profit there. I mean we don't break that down. So the business is performing really well, the overall wealth business. And I just remind you all that it is from the Adviser Platform and the workplace business that we deliver the GBP 280 million. The investment that we're making in the direct wealth business, the benefits of that come later. And I think -- but they're important benefits and they will come, particularly with the opportunities that exist in the market. But I think we said this last time, we are retaining over 90% of the Workplace business. We are winning about 76% of the schemes that we write on workplace and the proposition just keeps getting stronger and stronger. And if you add into that, the tailwinds that potentially come from the pension reviews, the government pension reviews and things like targeted support because obviously, the targeted support will come out of the Workplace customers. So we've got the potential to earn from that too. We are super excited about the wealth business. So I guess there will be more to come on that in the future, but we feel okay about that. We don't talk about India and China. I think there's really nothing more -- there is nothing more to say.

Let me give you a little bit on the sort of profitability and developments this half. I mean we don't talk about them because they're not part of what we describe as the core markets but they are two joint ventures that we manage effectively for value. And the Chinese business, in particular, is sizable and a successful business over there. If I look at the numbers for the half, the sales are up sort of 12%. It's largely driven by China, where we've seen sales volumes a little higher. India, a bit lower, but that's largely due to shift in product mix. And if I look at the margin, it's improved a little as we focus on expenses and efficiency. And if I look at the OSG, that's actually increased this we did do a management action in China, which was refining modeling within the way we reflect the solvency numbers, which was part of that increase, but there was underlying capital generation as well. So they are two parts of the group that they're not part of the growth strategy. They're both capital intense. So they don't feature on where do we want to grow chart, but we manage them effectively, and that's all the risk to take.

This is Andrew Crean from Autonomous. If I could ask two questions. Can we talk a bit about customers or direct customers, if possible, about the NPS scores there in comparison to yours and whether you've done any analysis to look at when you take them on board, whether they've already got Aviva policies and therefore, there'll be multiple policy owners. Secondly, I noticed and it's been an issue for some time, your operating free surplus generation or own funds generation is below your cash remittances, which means that you're bringing capital up from the divisions to the center. Is that something that you will continue to do. And then thirdly, on the U.K. motor business, if you say rates are down 3% and burn cost is up about 5%, mid-single digits, that would argue broad structure for about an 8-point deterioration in the combined in '26 as that earns through. What other factors am I missing for that not to be the case?

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

Yes.

So on those direct customers, so yes, obviously, the NPS, I think the customer experience is good. So we've sort of not got anything much more to say on that, but we will have more to say in November. But certainly, when I went -- I was in on the first day with the customer service team, I think, honestly, it was like walking into an Aviva office in terms of people were thinking about customers. It was just part of the DNA. And I think I felt very good about that. Clearly, what we can bring to that particular benefit is just that relentless focus on improving the customer journey, whether that's in the digital experiences in the claims space. And so I think that there is plenty more that we can do to improve that. On the multiproduct holdings, we'll come back with more data in November, Andrew. But I do think that we feel there is a real appetite and opportunity to be able to do -- to effectively offer the Aviva proposition to the direct line customers where they don't already have that -- and obviously, with our single view of customer, we would clearly like to replicate that. I mean I'm definitely -- we're not saying we'll be able to do that quickly to be able to replicate that with for all the direct line customers as well. So we feel like we're in a very good space on that. And I think genuinely that we are ever so excited about the opportunity here because that's an area where we've got a proven track record. We've got the technology. We've got the app. We've shown what we can do, and it will be a sort of lift and shift across to that business. And of course, the tech team will say to me that I'm taking being way too simplistic about that. I mean we've been able to do it here. So I'm excited about it. Charlotte, do you want to...