Aviva warns over potential for Iran conflict to send claims costs up
The boss of insurer Aviva has cautioned that a lengthy conflict in the Middle East could send the cost of vehicle parts and repairs surging in an echo of the aftermath seen after Russia’s invasion of Ukraine.
CEO Amanda Blanc said the group has seen limited claims so far relating to the US-Israel war with Iran, but flagged the potential for claims costs to jump if supply chains are badly disrupted for a long time.
She said: “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.
“If this goes on for a prolonged period of time, we would expect that this could have some impact, but to speak about this from an Aviva perspective, we are very well placed to manage that with our supply chain and our garage network. We will take action to make sure we look after our customers and price accordingly for any new inflationary impact.”
She said there had been “very limited” travel claims so far.
Ms Blanc added: “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.”
Full-year results from Aviva showed annual earnings jumped 25% higher, while the firm also announced it was resuming share buybacks as it continues to benefit from its £3.7bn takeover of Direct Line.
The group unveiled an earnings haul of £2.2bn for 2025, up from £1.8 billion in 2024, including a £174m contribution from Direct Line, helping the group hit its financial targets a year early. Aviva unveiled a £350 million share buyback after putting these on hold due to the Direct Line deal, which completed last year.
Ms Blanc highlighted an “outstanding performance”. She said: “We have transformed Aviva over the last five years and whilst we have made significant progress, there is so much more to come.”