Aviva CEO Flags Potential Claims Cost Surge from Iran Conflict
Amanda Blanc, the chief executive of insurance giant Aviva, has issued a stark warning that a protracted conflict in the Middle East, particularly involving Iran, could lead to a significant increase in claims costs for the industry. Speaking on Thursday, Blanc highlighted the risk of supply chain disruptions mirroring those seen after Russia's invasion of Ukraine, which could inflate the prices of vehicle parts and repairs.
Supply Chain Vulnerabilities and Historical Parallels
Blanc pointed to the Ukraine crisis in 2022 as a clear case study, where supply chain interruptions had an inflationary impact on automotive components and replacement vehicles. She noted that while Aviva has so far seen limited claims directly related to the US-Israel war with Iran, the potential for costs to jump remains high if hostilities are prolonged.
"We have a good case study on this in terms of the Ukraine situation back in 2022 and the impact on the supply chain, which had an inflationary impact on vehicle parts and replacement vehicles," Blanc stated. "Obviously, if this goes on for a prolonged period of time, we would expect that this could have some impact."
Aviva's Preparedness and Customer Focus
Despite these concerns, Blanc expressed confidence in Aviva's ability to manage such challenges, citing the firm's robust supply chain and owned garage network. "To speak about this from an Aviva perspective, we are very well placed to manage that with our supply chain and our owned garage network," she assured.
The CEO emphasized that Aviva would take necessary actions to protect customers and adjust pricing in response to any new inflationary pressures. "We will take action as necessary to make sure we look after our customers and price accordingly for any new inflationary impact," she affirmed.
Travel Claims and Guidance
On the travel insurance front, Blanc reported "very limited" claims so far. However, she acknowledged increased customer inquiries about travel safety, with Aviva directing policyholders to Foreign Office guidance. "We have had calls from customers asking about whether they should travel and those sorts of things, and we are pointing them to the Foreign Office guidance on that," she added.
Strong Financial Performance and Strategic Moves
Blanc's comments came as Aviva released its full-year results for 2025, showcasing a remarkable 25% leap in annual earnings to £2.2 billion, up from £1.8 billion in 2024. This performance was bolstered by a £174 million contribution from Direct Line, following Aviva's £3.7 billion takeover of the rival insurer, allowing the group to hit its financial targets a year early.
In a move signaling confidence, Aviva announced the resumption of a £350 million share buyback programme, which had been paused due to the Direct Line acquisition. Blanc hailed an "outstanding performance" and underscored the firm's transformation over the past five years, with more progress anticipated.
Embracing Artificial Intelligence
Looking ahead, Blanc identified artificial intelligence (AI) as a key focus area for Aviva, highlighting its potential to revolutionise claims processing, underwriting, and customer experience. "We have clear strengths in artificial intelligence which are creating major opportunities to transform claims, underwriting and customer experience," she explained, positioning the company at the forefront of technological innovation in the insurance sector.
