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Aviva's acquisition of Direct Line on track

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General insurance premiums rise, driven by UK & Ireland

*

Remains committed to net zero by 2040

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Canada earnings hit by natural disasters

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Impact from U.S. tariffs on Canada manageable - CEO

(Adds analyst comment in paragraph 3, quotes from media call in

paragraphs 8 and 10, background in paragraphs 6,7,9)

By Shashwat Awasthi and Yadarisa Shabong

Feb 27 (Reuters) - British insurer Aviva beat

annual profit expectations on double-digit growth in its general

insurance premiums in 2024, and said its planned 3.7 billion

pound ($4.69 billion) acquisition of smaller rival Direct Line

was on track.

The company, which offers car, home and life insurance in

the UK, Ireland and Canada, reported operating profit of 1.77

billion pounds for the year ended December 31, 2024, above a

company-compiled analysts' consensus of 1.67 billion pounds.

Shares in Aviva rose as much as 2% in early trade to

their highest since May 2018. Flagging lower costs, JP Morgan

analysts said the profit beat "appears to be sustainable" and

they expect the market to upgrade forecasts.

Many insurers have enjoyed a profitable year by raising

premiums for motor and home insurance in the face of inflation

and natural disasters, including wildfires and storms.

Aviva's annual general insurance gross written premiums for

the year rose 14% to 12.2 billion pounds, while growth at its UK

and Ireland insurance, wealth and retirement business also

exceeded expectations.

Chief Executive Amanda Blanc has been looking to accelerate

Aviva's growth in less capital-intensive businesses such as

motor and life insurance.

Her deal to buy AIG's UK life insurance business

and acquisition of insurance platform Probitas was quickly

followed by a swoop on Direct Line to become Britain's

largest home and motor insurer.

Aviva gave no update on the potential cost savings from

the Direct Line takeover, but analysts at Jefferies cited

Aviva's goal for its dividend per share to grow in mid-single

digits post-completion and a restart of its share buybacks in

2026 as positives.

"We've got quite a lot on our plate," Blanc told journalists

in a conference call. "It's now going to be key that we see all

of those transactions deliver for us."

GLOBAL CHALLENGES

Threats of U.S. trade tariffs and new policies to

change

net zero carbon emission targets proposed by President

Donald Trump mean global insurers are facing risks of

significant spikes in claims costs.

Blanc acknowledged the potential of a hit from tariffs

on its Canada business, but said the impact would be

"manageable".

Aviva's annual operating profit in Canada was slashed by a

quarter over the year, following a spate of costly natural

disasters such as wildfires in Jasper, a hailstorm in Calgary

and flooding in major cities.

Insurers like Aviva have long since recognised the pressures

climate change have imposed on sound underwriting and in 2021,

Aviva became the world's first insurer to announce its ambition

to become net zero by 2040.

It said on Thursday it remained committed to the task.

"While we are working towards our sustainability ambitions,

we recognise that while we have control over Aviva's operations

and influence over our supply chain, when it comes to

decarbonising the economy in which we operate and invest, Aviva

is one part of a far larger global system," it said in a

statement.

($1 = 0.7890 pounds)