Business
Update on Direct Line Capital Model
Aviva plc has received approval from the PRA to revoke Direct Line's Solvency II partial internal model, allowing Direct Line's capital requirements to be calculated using the standard formula from December 31, 2025. This change is expected to realize approximately £0.1 billion in capital synergies by the end of 2025, contributing about 2 percentage points to Aviva's full-year Group shareholder solvency ratio. The company anticipates further capital synergies exceeding £0.5 billion by the end of 2026 as Direct Line's business is integrated onto Aviva's internal model. Disclaimer*
About this update from Aviva Plc
[{"type":"text","content":"\n\n \n \n \n \n \n5 January 2026\n \nAviva plc\nUpdate on Direct Line Capital Model\n \n \nAviva plc notes the PRA's written notice published earlier today, approving our request to revoke Direct Line's (DL's) Solvency II partial internal model covering UK Insurance Limited and Churchill Insurance Company Limited.\n \nFrom 31 December 2025, DL's solo entity capital requirements can now be calculated using the Solvency II standard formula, and similarly DL can be included in Aviva's Group Solvency Capital Requirement (SCR) using the standard formula with adjustment. Although still prudent, this enables partial diversification benefits between DL and Aviva to be recognised from 31 December 2025. Previously, using DL's partial internal model, none of these diversification benefits could be recognised in Aviva's Group SCR.\n \nThis change in capital treatment is estimated to realise around £0.1bn of capital synergies at 31 December 2025, adding c.2pp to Aviva's full year 2025 Group shareholder solvency ratio. A further update will be provided alongside our full year results in early March, once the impacts are finalised.\n \nRemoving DL's partial internal model supports our plans to move DL's business onto Aviva's internal model in due course, subject to PRA approval. We remain on track to achieve this and to realise greater than £0.5bn of total capital synergies by around the end of 2026, as outlined at our In Focus event in November 2025.\n \n-ends-\n \n\n\n\n\nEnquiries:\n\n\n\n\n\n\n\nMedia:\n\n\n\n\n\n\n\nAndrew Reid\n\n\n+44 (0)7800 694 276\n\n\n\n\nSarah Swailes\n\n\n+44 (0)7800 694 859\n\n\n\n\nMarion Fischer\n\n\n+44 (0)7800 693 219\n\n\n\n\n\n\n\n\n\n\n\n\nAnalysts:\n\n\n\n\n\n\n\nGreg Neilson\n\n\n+44 (0)7800 694 564\n\n\n\n\nJoel von Sternberg\n\n\n+44 (0)7384 231 238\n\n\n\n\nMichael O'Hara\n\n\n+44 (0)7387 234 388\n\n\n\n\n \nNotes to editors\n· We are the UK's leading diversified insurer and we operate in the UK,...