With a yield of 5.8%, Aviva (LSE:AV.) shares are currently one of the most generous income opportunities in the entire FTSE 100. And at today’s price of around 660p, buying 12,723 shares would unlock a £5,000 second income overnight.
However, buying that many shares won’t be cheap. In fact, it will cost around £83,972, which is a pretty serious sum. So is Aviva an equally serious investment?
A business firing on multiple cylinders
The first quarter of 2026 was a remarkable demonstration of what Aviva has become under CEO Amanda Blanc. General insurance premiums surged 19% to £3.4bn, powered by the integration of Direct Line into UK Personal Lines.
And the combined operating ratio improved 2.5 percentage points to 94.1%, which is a fancy way of saying that the business is now earning a considerably healthier profit on every pound of premium it writes.
The Wealth division is equally compelling. Net flows of £3.3bn were 49% higher year-on-year, with the Workplace pensions business alone attracting £2.0bn of net inflows (up 71%). And total Wealth assets under management now stand at £233bn.
In the words of Blanc: “We have delivered another quarter of strong trading, building momentum in 2026. We delivered profitable growth across Aviva despite global market volatility, demonstrating yet again the advantages of our market-leading positions and diverse business model.”
Overall, the company looks like it’s firmly on track to deliver across all of its 2028 targets:
- Operating earnings per share growth of 11% a year.
- A return on equity above 20% by 2028.
- Cumulative cash remittances of over £7bn between 2026 and 2028.
So far, this is sounding like a promising investment opportunity. So what’s the catch?
Where the risks lie
The Direct Line integration, while progressing well, remains the biggest execution challenge on Aviva’s plate.
UK Commercial Lines premiums fell 8% in the first quarter as management deliberately pulled back from writing business that didn’t meet its profitability hurdles. Seeing this underwriting discipline is encouraging, but it also means that the top-line growth story in General Insurance is suffering as a result.
Bulk purchase annuity volumes were also 52% lower year-on-year as Aviva chose to maintain pricing discipline rather than chase volume in a competitive pension de-risking market.
In the long run, that’s again a sensible move. But in the short run, it leaves a gap in the growth story that the market’s watching closely.
A £5,000 income worth chasing?
Aviva isn’t a business struggling to find its footing. It’s an established and diversified UK insurance business that’s rapidly expanding its reach. And while there are some valid and genuine concerns over near-term headwinds, management’s prudent execution makes me cautiously optimistic for the long run.
With that in mind, investors seeking to unlock some chunky passive income may want to consider taking a closer look. And it’s not the only dividend opportunity that I’ve spotted this week…
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Zaven Boyrazian does not hold any positions in the companies mentioned.
